TMI Blog2023 (10) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... this case. Relying on the above said decision of the Hon ble Supreme court, it is held that the demand of service tax along with interest and penalty confirmed in the impugned order are not sustainable. Since the demand of service tax is not sustainable, the demand of penalty under Section 76 does not arise. Accordingly, there is no merit in the department s appeal. Appeal of Revenue dismissed. - HON BLE MR. P. K. CHOUDHARY, MEMBER (JUDICIAL) And HON BLE MR. K. ANPAZHAKAN, MEMBER (TECHNICAL) Shri A. Roy, Authorized Representative for the Appellant/Revenue Shri Amitava Ghosh Shri Sourav Chatterjee, both Advocates for the Respondent/Assessee ORDER PER K. ANPAZHAKAN The appellant is engaged in providing construction of complex service and commercial or industrial construction service. The Appellant entered into a contract dated 12.12.2007, with M/s Kolkata West International City( Herein after referred as KWIC) for construction of new residential complex and civil structures at the Kolkata West International City (phase I). As per the contract KWIC supplied materials such as cement, TMT bars etc free of cost to the Appellant. The Appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant period and also circulars/notifications cannot have retrospective effect in respect of the said issue. Accordingly, they contended that the order passed by the Ld. Commissioner cannot be maintainable in law. 4. In support of their contention that the materials supplied free of cost by the service recipient are not includable in the assessable value, they relied upon the decision of the Hon ble Supreme Court in the case of Commissioner of Service Tax and Ors Vs Bhayana Bulders (P) Ltd, reported in 2018 (010) GSTL 0118 S.C, wherein it has been held that value of goods/materials supplied free of cost by the recipient of service used for providing taxable service are not includable in the assessable value for the purpose of payment of service tax. Accordingly, they contended that the demands confirmed in the impugned order not sustainable. 5. The Ld A.R reiterated the findings of the adjudicating authority. 6. We observe that the Appellant has entered into a contract with M/s KWIC and as per the terms of the contract KWIC supplied materials such as cement, TMT bars etc. free of cost to the Appellant. The Appellant has not added the value of materials received free of cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification dated September 10, 2004 read with notification dated March 01,2005. 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 contract of providing services as well as supply of goods, the said notifications were issued for the convenience of the Assesses. According to the Revenue, the purpose was to bifurcate the component of goods and services into 67% 33% and to provide a ready for formula for payment of service tax on 33% of the gross amount. It was submitted that this percentage of 33% attributing to service element was prescribed keeping in view that the entire construction project, roughly 67% comprising the cost of material and 33% is the value of services. However, this figure of 67% was arrived at keeping in mind the totality of goods and materials that are used in a construction project, roughly 67% comprises the cost of material and 33% is the value of services. However, this figure of 67% was arrived at keeping at keeping in mind the totality of goods and materials that are used in a construction project. Therefore, it was incumbent upon the Assessee to incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f taxable services covered by Sub-clause (zzq) of Clause (105) read with Clause (25b) and Sub-clause (zzzh) of Clause (105) read with Clause (30a) and (91a) of Section 65 of Chapter V of the Act. This Court in the aforesaid judgment in respect of five taxable services [viz. Section 65(105) (g), (zzd), (zzh) and (zzzh)] has held as under: 23. A close look at the Finance Act, 1994 would sho that the fixed taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service as any service provided . 42 ..Since the levy itself of service tax has been found to be non-existent, no question of any exemption would arise. It is clear from the above that the service tax is to be levied in respect of taxable services and for the purpose of arriving at 33% of the gross amount charged, unless value of some goods/materials is specifically included by the Legislature, that cannot be added. 20. It is to be borne in mind that the notifications in questions are exemption notifications which have been iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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