G. Raghuram, J.
1. Heard the ld. Counsel for the appellant and the ld. Authorized Representative for the respondent/ Revenue. At the interlocutory stage since the issue is covered in favour of the assessee by the decision of the Larger Bench of this Tribunal in M/s Bhayana Builders (P) Ltd. vs. C.S.T., Delhi reported in 2013 (32) STR 49 (Tri-LB) we dispose of the substantive appeal itself.
2. The assessee has preferred this appeal against the order dated 22.11.2011 passed by Commissioner of Customs, Central Excise and Service Tax, Ghaziabad, confirming service tax demand of Rs.1,20,84,695/-, apart from interest and penalty as stipulated. The demand arises consequent on denial by the adjudicating authority of the benefits claimed by the assessee under abatement Notification No.1/2006-ST dated 1.3.2006, on the ground that the assessee had failed to declare the gross consideration received from the service recipients, including the value of goods freely supplied to the assessee/service provider for the taxable service namely, construction of residential complex services; industrial or commercial construction service and works contract service.
3. The Larger Bench of this Tribunal in Bhayana Builders (P) Ltd. (supra) interpreted the scope inter- alia of Notification No.1/2006-ST to mean that the value of free supplies by service recipients are not comprehended within the scope of gross consideration received; and that the Explanation to the said Notification which explains that the gross amount charged shall include the value of all the goods and material supplied or provided or used for providing the taxable service by the service provider, does not comprehend the value of free supplies by service recipients.
4. Ld. Authorised Representative for the respondent/Revenue would however contend that the decision of the Larger Bench decision in Bhayana Builders (P) Ltd. is no longer a good law in view of the decision of the Delhi High Court in G.D. Builders vs. UOI reported in 2013 (32) STR 673 (Del.).
5. In our considered view, this contention is stated to be rejected. In G.D. Builders , the Delhi High Court had an occasion to consider the validity of exemption/ abatement Notifications including Notification No.1/2006-ST. The High Court after considering several judgments explaining the scope of levy of sales tax and service tax and allocation of legislative powers under our constitutional scheme, to the Union and the States, authorizing levy of service tax and sales tax/VAT, qua distinct and exclusive allocation of fields of legislation, under List and List II of the seventh Schedule to the Constitution; and after referring to several judgments of the Supreme Court including the judgment in M/s Gannon Dunkerley and Co. and others vs. State of Rajasthan and Others (1993) 1 SCC 364; in Mahim Patram (P) Ltd. vs. UOI and Ors. (2007) 3 SCC 668; and the later decisions in K. Raheja Development Corporation vs. State of Karnataka -2006 (3) STR 337 (SC) and in Larsen and Tourbro Limited vs. State of Karnataka, concluded that while the value of goods transferred or deemed to have been transferred during the course of execution of composite works contract involving supply/rendition of goods and services, must exclude the value of goods for levy of service tax; reiterated the principle that since the exemption/abatement Notifications provide an alternative facility to assessees to have their tax liability computed by approximation formulae instead of being subjected to detailed assessment and evaluation of the value of the goods, for exclusion of this component for levy of service tax; the exemption/abatement Notifications cannot be challenged as ultra vires the charging provisions of service tax legislation. The interpretation of Notification No.1/2006-ST however did not fall for consideration by the High Court in G.D. Builders. The Notification however was the specific subject matter of Bhayana Buillders (P) Ltd. I
6. In this view of the matter, the decision of the Delhi High Court in G.D. Builders offers no assistance in elucidating the contours of Notification 1/2006-ST; and the scope of this Notification stands explained only in Bhayana Builders (P) Ltd.; Revenue fairly concedes that the judgment in Bhayana Builders (P) Ltd. is still operative.
7. On the aforesaid analyses and following the judgment of the Larger Bench in Bhayana Builders (P) Ltd., we allow the appeal, but in the circumstances without costs.