TMI Blog2023 (4) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... As per Section 67 of Finance Act, 1994 only that value which is charged by the service provider to the service recipient shall be considered the gross value. Value of the material supplied by the service recipient since not charged by the service provider, cannot be included in the gross value of the service. In view of the settled legal position by the Apex Court, charge of the department clearly fails and on that basis exemption cannot be denied. Charge of mis-declaration of classification - HELD THAT:- Whether the service classified under Construction Service as claimed by the appellant or under Erection, Commissioning or Installation service as held by the Revenue, the abatement of 67% is available in both the categories therefore, the misclassification of service does not have any revenue implications. It is observed that the appellant have rented out Hydra Crane also however, there is no separate working of service tax on the said element. The Adjudicating Authority need to re-quantify the service tax if any arises after allowing the abatement in respect of services of Erection, Commissioning or Installation - the impugned order is set-aside - Appeal allowed by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present appeal is filed by the appellant. 2. Shri Chiranjeev Tandan learned Counsel appearing on behalf of the appellant submits that the main issue raised by the department is that in order to avail exemption Notification Nos. 19/2003-ST dated 21.08.2003, 15/2004-ST dated 10.09.2004 and Notification No. 1/2006-ST dated 01.03.2006, the appellant is required to include the value of materials supplied by their clients. In this regard he submits that the issue is no longer res-integra as held in various decisions including in the case of Bhayana Builders (P) Limited, that to avail exemption notifications (supra), the value of material supplied by service recipient need not be included in the gross value. He placed reliance on the following decisions:- (a) ATR Constructions Pvt. Limited vs. Commissioner Of C. Ex., Ghaziabad [2014 (35) S.T.R. 92 (Tri. - Del.)] (b) S.V. Engineering Constructions vs. Commr. of C.C.E. S.T., Guntur - [2016 (44) S.T.R. 319 (Tri. - Bang.)] (c) Commissioner of Service Tax vs. Bhayana Builders (P) Limited [2018 (10) G.S.T.L. 118 (S.C.)] (d) Union of India vs. Intercontinental Consultants And Technocrats Pvt. Limited - [2018 (10) G.S.T.L. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court reported at 2008 (10) GSTL 118 (SC) and is reproduced below:- 16 . In fact, the definition of gross amount charged given in Explanation (c) to Section 67 only provides for the modes of the payment or book adjustments by which the consideration can be discharged by the service recipient to the service provider. It does not expand the meaning of the term gross amount charged to enable the Department to ignore the contract value or the amount actually charged by the service provider to the service recipient for the service rendered. The fact that it is an inclusive definition and may not be exhaustive also does not lead to the conclusion that the contract value can be ignored 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e service . According to these notifications, service tax is to be calculated on a value which is 33% of the gross amount that is charged from the service recipient. Obviously, no amount is charged (and it could not be) by the service provider in respect of goods or materials which are supplied by the service recipient. It also makes it clear that valuation of gross amount has a causal connection with the amount that is charged by the service provider as that becomes the element of taxable service . Thirdly, even when the explanation was added vide notification dated March 1, 2005, it only explained that the gross amount charged shall include the value of goods and materials supplied 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 . 19 . Matter can be looked into from anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction, it may additionally be noted (as pointed out by the Learned Counsel for the respondent) that the assessee was a sole proprietorship concern of Mr. Narender Singh Atwal, who died on February 24, 2014. This is so stated in the counter affidavit filed by the respondent on May 16, 2017 and this position has not been disputed by the Department. This appeal, in any case, has abated as well in view of the judgment of this Court in Shabina Abraham Ors. v. Collector of Central Excise Customs - (2015) 10 SCC 770 = 2015 (322) E.L.T. 372 (S.C.). 23 . As a result, all appeals stand dismissed. 5. In the above judgment it was categorically held that as per Section 67 of Finance Act, 1994 only that value which is charged by the service provider to the service recipient shall be considered the gross value. Value of the material supplied by the service recipient since not charged by the service provider, cannot be included in the gross value of the service. In view of the settled legal position by the Apex Court, charge of the department clearly fails and on that basis exemption cannot be denied. 6. As regards the charge of mis-declaration of classification, we find that w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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