Commissioner of Central Excise, Mangalore
FINAL ORDER NO. 499 OF 2011
APPEAL NO. ST/378 OF 2006
JUNE 30, 2011
M.V. Ravindran, Judicial Member
This appeal is directed against the Order-in-Original No. 02/2010 dated 23.2.2010, passed by the Commissioner of Central Excise, Mangalore.
2. Vide Stay Order No. 28/2011, dated 7.1.2011, this Bench had directed the appellant to deposit the entire amount of service tax confirmed by the adjudicating authority along with interest within eight weeks. The appeal was dismissed for non-compliance of the order of pre-deposit. Aggrieved by such an order, the appellant filed a Writ Petition No. 7503/2011 (T-CES) before the Hon’ble High Court of Karnataka, Hon’ble High Court, while disposing of the Writ Petition had directed the party to deposit 50% of the tax in terms of the demand within four weeks and on such compliance being reported, Hon’ble High Court directed the Tribunal to endeavour to dispose of the appeal within three months. In pursuance to such an order, the appeal was listed before the Bench on 06/6/2011 which got adjourned. Today the matter is taken up for final disposal.
3. The learned Counsel submits that the issue involved is regarding the tax liability on (i) ‘Commercial or Industrial Construction’ (ii) ‘Construction of Residential Complexes’ undertaken by the appellants. It is her submission that the demand is for the period 2004-05 to 2008-09. It is the submission that the adjudicating authority has erred in including the vaiue of free materials supplied for construction of few buildings and has not considered the gross amount billed and received by them. She submits that the adjudicating authority has mixed up all the amounts received and charged the service tax on the entire amount, despite their eligibility for benefit of Notification No. 15/2004-ST dated 10/09/2004 and 1/2006 dated 1/3/2006.
4. The learned Jt. CDR submits that the calculation done by the adjudicating authority is correct. At the same time, he submits that in respect of free supply of materials, the matter needs to be reconsidered by the adjudicating authority.
5. On a careful consideration of the submissions made by both sides, we find that the adjudicating authority seeks to include the value of free supplied materials received by the appellant in the gross value of the services rendered by the appellant. It is seen that after inclusion of gross value, the adjudicating authority has not given the benefit of Notification No. 15/2004, dated 10/09/2004 in the form of abatement of 67%. In our considered view, if free materials were supplied by the principals to the appellant, if the value needs to be included in the gross value, that is claimed as a portion of the material, if so, the benefit of the Notification No. 15/2004 could not be restricted and it is for the adjudicating authority to see whether the records maintained by the assessee/supplier are enough to come to a conclusion, that the appellant can avail the benefit of Notification No. 15/2004 and only charge service tax on the balance of 33% of the value sought to be included. As regards, other demands raised and confirmed by the adjudicating authority, we find that there is some confusion in the value taken for demand of service tax by the adjudicating authority. Since the issue needs recalculation in terms of various judicial decisions and based upon factual matrix of the case, without expressing any opinion on merits of the case, keeping all the issues open, we remand the matter to the adjudicating authority for reconsideration of the issues afresh after following the principles of natural justice. Since the issue involved is of Show Cause Notice dated 14.10.2009, the adjudicating authority will try and dispose off the matter within a period of three months from the date of the receipt of this order. The appeal is allowed by way of remand.