TMI Blog2022 (9) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Applicant has filed these applications for early hearing of appeals stating as follows:- 2. The Applicant is engaged in the business of chartering of rigs on hire basis to Oil Natural Gas Corporation (ONGC). The Applicant was duly discharging service tax on the whatever amount it charged for such services rendered to ONGC under the head 'mining services'. However, the issue involved in the present appeal is whether free of cost fuel/diesel supplied by service recipient i.e., ONGC in terms of agreement is includible in taxable value of mining services rendered by the Applicants. 3. The issue is no more res integra and is squarely covered in favour of the Applicant by the decision of the Hon'ble CESTAT in the matter of M/s. Vantage International Management Company v. CCGST, 2021 (2) TMI 564 CESTAT MUMBAI and M/S. Greatship (India) Ltd. v. CST, 2021 (9) TMI 1173 CESTAT MUMBAI. In both these decisions, the Hon'ble CESAT has followed the principle laid down in the case of Bhayana Builders (P) Ltd. and Others. 2013-TIOL-1331-CESTAT-DEL-LB upheld by the Hon'ble Supreme Court in CST v. Bhayana Builders (P) Ltd., 2018 -TIOL-66-SC-ST. 2.1 We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,64,62,211/- Apr. 15 to Mar 16 4.3 In paras 28 and 29, the Principal Commissioner has observed as follows:- 28. The Noticee, in their reply dated 28.06.2019, have referred to the judgment of Larger Bench of the Tribunal in case of M/s. Bhayana Builders (P) Ltd. (2013-TIOL-1331 CESTAT-DEL-LB]. The said judgement of the Larger Bench has ultimately been upheld by the Hon'ble Supreme Court in Commissioner of ST Vs. M/s.Bhayana Builders in CA No. 1335-1358. I am of the view that the facts of the said case are different than the instant case before me. In the said case the issue being decided is that of validity of Rule 5 of the Valuation Rules and valuation of Construction Services' provided by M/s. Bhayana vis- -vis exemption Notification No. 15/2004-ST dated 10.09.2004 and Notification No. 4/2005-ST dated 01.03.2005. Whereas, in instant case before me the Noticee is providing the Mining Services' to their customers and Notification No. 15/2004 ST is not relevant. The said judgment states that the notification no. 04/2005-ST dated 0.03.2005 is ultra vires to the provisions of Section 67(1) because this no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither pertain to charging service tax on goods nor to the provisions of Section 67(1)(i) but to Section 67(1)(ii) which prescribes for charging service tax on any non monetary considerations including value of free supplies of goods provided for taxable services. The above said judgment of Larger Bench of Tribunal was challenged by the department in Apex Court and Hon'ble Supreme Court has passed final order in the matter on 19.02.2018. In the said order, Hon'ble Supreme Court has observed that The amount charged should be for for such service provided. Section 67 clearly indicates that the gross amount charged by the service provider has to be for the service provided. Therefore, it is not any amount charged which can become the basis of value on which service tax becomes payable but the amount charged but the amount charged has to be necessarily a consideration for the service provided which is taxable under the Act. By using the words for such service provided the Act has provided for a nexus between the amount charged and the service provided . In instant case before me, there is no dispute about the fact that the subject repair material diesel and equipments have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e included in respect of such materials/goods which are supplied by the service recipient, naturally, no amount is received by the service provider/assessee. Though, sub-section (4) of Section 67 states that the value shall be determined in such manner as may be prescribed, however, it is subject to the provisions of sub-sections (1), (2) and (3). Moreover, no such manner is prescribed which includes the value of free goods/material supplied by the service recipient for determination of the gross value. 14 . We may note at this stage that Explanation (c) to sub-section (4) was relied upon by the learned counsel for the Revenue to buttress the stand taken by the Revenue and we again reproduce the said Explanation hereinbelow in order to understand the contention : (c) gross amount charges includes payment by cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and [book adjustment, and any amount credited or debited, as the case may be, to any account, whether called suspense account or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored and the value of free supply goods can be added over and above the contract value to arrive at the value of taxable services. The value of taxable services cannot be dependent on the value of goods supplied free of cost by the service recipient. The service recipient can use any quality of goods and the value of such goods can vary significantly. Such a value, has no bearing on the value of services provided by the service recipient. Thus, on first principle itself, a value which is not part of the contract between the service provider and the service recipient has no relevance in the determination of the value of taxable services provided by the service provider. 17 . Faced with the aforesaid situation, the argument of the Learned Counsel for the Revenue was that in case the assesses did not want to include the value of goods/materials supplied free of cost by the service recipient, they were not entitled to the benefit of notification dated September 10, 2004 read with notification dated March 1, 2005. It was argued that since building construction contract is a composite contract of providing services as well as supply of goods, the said notifications were issued fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied or provided or used by the provider of construction service. Thus, though it took care of the value of goods and materials supplied by the service provider/assessee by including value of such goods and materials for the purpose of arriving at gross amount charged, it did not deal with any eventuality whereby value of goods and material supplied or provided by the service recipient were also to be included in arriving at gross amount gross amount charged . 4.5 The decision of Bhayana Builders has been followed by us in the case of Vantage International Management Company vs. CCGST, Mumbai East [2021 (48) GSTL 265 (Tri.-Mumbai)]. Paras 7 and 8 of the said decision are reproduced below:- 7 . The period of dispute involved in this case is from December, 2010 to December, 2015. The provisions of valuation of taxable services for charging service tax are contained in Section 67 ibid. The said statutory provision has defined the term consideration , to include any amount that is payable for the taxable services provided or to be provided for provision of taxable service. Section 67 ibid was amended by the Finance Act, 2015 (20 of 2015), w.e.f. 14-5-2015. The effect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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