Service Tax
TRT-2025-
Cestat New Delhi
Date:-02-01-23
In:-
Issue Favourable to Tax Payer ?:-
Order date – 02 January 2023
Parties: M/s Associated Soapstone Distributing Company Pvt. Ltd. Vs The Commissioner Central Excise Udaipur (Raj.)
Facts –
- The Appellant, M/s Associated Soapstone Distributing Company Pvt. Ltd. is engaged in providing mining services to Rajasthan Mines. The appellant was provided with free items by Rajasthan Mines in the total taxable value of mining services.
- Show cause notices were issued to the appellant mentioning therein that non-inclusion of the value of free items provided during the period October 2009 to September 2014 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.
Issue –
- Whether the value of items supplied free of cost have to be included in the value of mining services provided by the appellant?
Order –
- The Tribunal held that the decision of the Supreme Court in Bhayana Builders are clearly applicable to the facts of the present case, it was held 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.
- The larger bench of the Tribunal in the case of Bhayana Builders held that the taxable construction service, being neither monetary nor non-monetary consideration, would be outside the taxable value of the “gross amount charged‟ within the meaning of section 67 of the Finance Act.
- Hence the appeal is allowed.
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