Order date – 21 July 2022

Facts – 

• The Appellant, Aneesh Engineers, paid Service tax under the head of ‘Erection Commissioning and Installation Service’.
• Revenue issued show cause notice seeking to classify this service provided by them under the head of ‘Commercial Industrial Construction Service’ which was adjusted in the amount already paid by appellant.
• Revenue further sought to include the value of free supply material in the assessable value and consequently, demand on that ground amounting to Rs. 31,74,721/- was also raised against the appellant in respect of the value of the free supply material.
• The issue was decided by the original adjudicating authority in favour of the appellant on the grounds of limitation and the demand was set aside. When the matter was agitated before the Commissioner (Appeals), the Commissioner (Appeals) reversed the order.
• Aggrieved, the Appellant filed an appeal.

Issue – 

• Whether the demand of Rs. 31,74,721/- raised by Revenue on the ground to include the value of free supply material in the assessable value is sustainable?

Order – 

• The Tribunal accepted the contention of appellant that the first appeal filed by revenue was only limited to the issue of addition of free supply material and no appeal was filed in respect of adjustment of Rs. 20,22,971/- from the head of ‘Erection Commissioning and Installation’ to the head of ‘Commercial Industrial Construction Service’. 
• From the above, it is apparent that the Revenue’s attempt to classify the service provided by the appellant under the ‘Commercial Industrial Construction Service’ and to include the value of free supply material has failed in the Tribunal.
• Therefore, the original self-assessment of the appellant made under the head of ‘Erection Commissioning Installation’ remained undisturbed. Thus, the claim of refund can only be made in respect of original assessment under the head of ‘Erection Commissioning & Installation’.