Service Tax
TRT-2025-
Cestat Ahmedabad
Date:-23-02-24
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 23 February 2024
Parties: Niko Resources Vs Commissioner of Central Excise & ST, Vadodara-i
Facts –
- The Appellant, Niko Resources, has received consulting engineering service from outside of India and has incurred certain expenses such as accommodation, travelling, food expenses etc. on engineers on behalf of their service provider during the provision of service.
- A show couse notice was issued alleging that the appellant did not include the value of expenses incurred by them for accommodation, travelling and foods expenses while discharging the service tax liabilty under reverse charge mechanism. The demand was confirmed.
Issue –
- Whether the value of services provided by free of cost to the engineers and staff should have been included in the taxable value?
Order –
- The Tribunal observed that the matter is no longer res[1]integra as Hon’ble Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt. Limited vs. UOI reported at 2013 (29) STR 9 (Delhi) held that “It is only the value of such service that is to say, the value of the service rendered by the petitioner to NHAI, which is that of a consulting engineer, that can be brought to charge and nothing more. The quantification of the value of the service can therefore never exceed the gross amount charged by the service provider for the service provided by him.”
- The above order of Hon’ble Delhi High Court has also been endorsed by Hon’ble Supreme Court in the case of UOI vs. Intercontinental Consultants and Technocrats Pvt. Limited reported in 2018 (10) GSTL 401 (SC) held that Therefore, value of free supplies of diesel and explosives would not warrant inclusion while arriving at the gross amount charged on its service tax is to be paid.
- Following the above decisions of the Hon’ble Courts, it was held that impugned order-in-appeal is not sustainable. Accordingly, the appeal is allowed.
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