TMI Blog2023 (1) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the taxable service under section 67 of the Finance Act. The Supreme Court observed that a plain reading of the expression the gross amount charged by the service provider for such service provided or to be provided by him‟ would lead to the conclusion that the value of goods/material that is provided by the service recipient free of charge is not to be included while arriving at the gross amount‟ for the reason that no price is charged by the assessee/ service provider from the service recipient in respect of such goods/materials. It needs to be noticed that the appellant had also placed the decision of the larger bench of the Tribunal in Bhayana Builders [ 2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] before the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icates the show cause notice dated 21.05.2013 issued for the period October 2009 to June 2012, show cause notice dated 23.09.2014 issued for the period July 2012 to September 2013 and the show cause notice dated 10.04.2015 issued for the period October 2013 to September 2014. The demand raised in all the aforesaid three show cause notices has been confirmed for the reason that though diesel and explosives were supplied free of cost to the appellant by Rajasthan States Mines and Minerals Ltd [ Rajasthan Mines ] , but as these items were consumed during the mining process and without use of these items the appellant could not have provided mining services, the value of these items would be includable in the taxable value of mining services. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes to the appellant for the provision of mining service was not to be included in the total value of taxable service and, therefore, did not pay the service tax. However, show cause notices were issued to the appellant mentioning therein that non inclusion of the value of free items provided by Rajasthan Mines had resulted in short payment of service tax since it was an additional commercial consideration flowing directly from the recipient to the appellant in relation to service provided. The appellant filed a reply to the three show cause notices, but by a common order dated 22.11.2016 the Commissioner confirmed the demand of service tax. The relevant portion of the order is reproduced below:- 15. In the instant case, the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of particular service. 5. The decision of the Larger Bench of the Tribunal in Bhayana Builders (P) Ltd. v/s Commissioner of Service Tax, Delhi [ 2013 (32) S.T.R. 49 (Tri.-LB) ] was distinguished by the Commissioner for the following reason :- 26. xxxxxxxxxx Notwithstanding the fact that the case of Bhavana Builders has not attained finality as an appeal against the same is pending before the Hon'ble Apex Court, I find that the case of Bhayana Builders is on an entirely different footing and relates to an entirely different taxable service, that of construction services. In terms of the provisions contained wider the Finance Act, 1994, the scheme of levy of service tax on construction services envisages abatement to such ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n included in the taxable value of services. 7. Shri Harshvardhan, learned authorized representative appearing for the Department, however, supported the impugned order. 8. The submissions advanced by the learned counsel for the appellant and the learned Authorized Representative of the Department have been considered. 9. The issue involved in this appeal is as to whether the value of items supplied free of cost by service recipient to the appellant have to be included in the value of mining services provided by the appellant. 10. This precise issue came up for consideration before the Supreme Court in Bhayana Builders as the issue before the Supreme Court was also whether the value of goods/material supplied or provided free of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case inasmuch as the charge in the show cause notice is that the cost of material supplied free of cost should be included in the gross value of the taxable service provided by the appellant. 13. The Commissioner was not justified in distinguishing the decision of the Larger Bench of the Tribunal in Bhayana Builders for the reason that it related to a different construction service and not mining service. The Commissioner should have followed the law laid down by the Supreme Court. 14. The order dated 18.11.2016 passed by the Commissioner cannot, therefore, be sustained and is set aside. Service Tax Appeal No. 50348 of 2017, Service Tax Appeal No. 50349 of 2017 and Service Tax Appeal No. 50350 of 2017 are, accordingly, allowed. (Or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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