Custom, Excise & Service Tax Tribunal
Bharti Airtel Ltd vs Gurgaon I on 8 October, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 60047 of 2018
[Arising out of Order-in-Original No. GST-GGM-COM-AKM-005-17-18 dated
29.09.2017 passed by the Commissioner of CGST, Gurugram]
M/s Bharti Airtel Ltd ......Appellant
Airtel Centre, Plot No.16, 4th Floor,
Udyog Vihar, Phase-IV,
Gurgaon, Haryana-122001
VERSUS
Commissioner of Central Goods ......Respondent
& Service Tax, Gurgaon-I Plot No.36&37, Sector-32, Gurugram, Haryana-122001 WITH
2. Service Tax Appeal No. 60207 of 2018 [ Bharti Airtel Ltd Vs Commissioner of CGST, Gurgaon-I] [Arising out of Order-in-Original No. GST-GGM-COM-SM-10/2017-18 dated 30.11.2017 passed by the Commissioner of CGST, Gurugram]
3. Service Tax Appeal No. 60385 of 2018 [ Bharti Airtel Ltd Vs Commissioner of CGST, Gurgaon-I] [Arising out of Order-in-Appeal No. 246/ST/GST-APPEAL-GURUGRAM/SG/2017 dated 15.12.2017 passed by the Commissioner (Appeals), CGST, Gurugram]
4. Service Tax Appeal No. 60333 of 2018 [Commissioner of CGST, Gurgaon-I Vs Bharti Airtel Ltd] [Arising out of Order-in-Original No. GST-GGM-COM-SM-10/2017-18 dated 30.11.2017 passed by the Commissioner of CGST, Gurugram]
5. Service Tax Appeal No. 60285 of 2021 [Commissioner of CGST, Gurgaon-I Vs Bharti Airtel Ltd] [Arising out of Order-in-Original No.33/ST/Commr./PKL/SSK/2020-21 dated 18.02.2021 passed by the Commissioner of CGST, Panchkula] APPEARANCE:
Shri B.L. Narasimhan, Ms. Krati Singh and Ms. Jashanpreet Kaur Advocates for the Appellant/Assessee Shri Anurag Kumar and Shri S.K. Meena, Authorized Representative for the Respondent/ Revenue 2 ST/60047/2018 & 03 others CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 61471-61475/2025 DATE OF HEARING: 26.09.2025 DATE OF DECISION: 08.10.2025 P. ANJANI KUMAR:
Brief facts of the case are that the appellants are engaged in providing various taxable services and registered under "Telecommunication Service, Business Support Services, Sponsorship Service" etc. The appellant offers" Airtel Employees Services Scheme" to its employees ("Scheme‟), under which, employees are granted waiver from payment of telephone charges up to the Call Free Allowance ("CFA‟) limit for mobile phones and fixed line connections; the waiver is allowable only to the employees of the Appellant and not their relatives and employees of other group companies; CFA limit is on a monthly entitlement basis and any unused portion is not carried forward to the next month; in case an employee exceeds the CFA limit granted to him, the excess amount is collected by the Appellant along with appropriate amount of service tax payable, which is deposited by the Appellant; however, if the employee proves that the excess usage was directly related to work then exemption can be granted subject to approval from Function Heads or CEO/COO as specified under the Scheme; in case of the approval of the said waiver, waived amount is reimbursed as per a laid down process. Revenue conducted an Audit of the appellant's circle in Karnataka; appellant was as ked to submit details of the waiver granted by the 3 ST/60047/2018 & 03 others Appellant to its employees. Initially, show cause notices dated 21.08.2008 and 20.04.2009 (for the period April 2006 to March 2007and April 2007 to September 2008) were issued to the Appellant for the Bangalore Circle proposing the demand of service tax under „telephone services‟ on the amount of call free allowance waiver granted by the Appellant to its employees.
2. After the appellants obtained centralized registration at Gurgaon, the appellants were issued a show cause notice dated 23.04.2010, demanding service tax of Rs.118,70,19,472/-, for the period October 2004-2009 along with interest and penalties. The proceedings culminated with the Final Order No.60102/2025 dated 27.01.2025 amended by Misc. Order No. 60436/2025 dated 27.03.2025 in Appeal No.ST/1768/2012 passed by this Bench.
However, Revenue issued periodical show cause notices dated 29.03.2011, 06.03.2012, 20.05.2014 & 04.04.2019, for the subsequent periods i.e. October 2009 to September 2010, October 2010 to March 2016 (minus 2012-13), April 2012 to March 2013 and April 2016 to June 2017 respectively demanding the service tax on the benefits given to the employees of the appellants. The show cause notices were adjudicated vide Orders-in-Original dated 30.11.2017, 20.09.2017, 15.12.2017 & 18.02.2021 respectively.
Learned Adjudicating Authority confirmed the demands along with penalties in respect of show cause notices dated 29.03.2011, 06.03.2012, 20.05.2014 and dropped the proceedings initiated by show cause notice dated 04.04.2019. Therefore, M/s Airtel are in appeal against the confirmation of duty along with penalty vide 4 ST/60047/2018 & 03 others Appeals No. ST/60047/2018, ST/60207/2018 & ST/60385/2018.
Revenue is in appeal vide Appeal No. ST/60333/2018 against the quantum of penalty imposed in respect of show cause notice dated 29.03.2011 and Appeal No. ST/60285/2021 dropping of demand of Rs.3,13,50,081/- in respect of show cause notice dated 04.04.2019.
3. Learned Counsel for the appellants submits that the issue is no longer res integra being decided by this very Bench vide Final Order No. 60102/2025 dated 27.01.2025 amended by Misc. Order No. 60436/2025 dated 27.03.2025. He submits that though it is the Department's contention that the said Final Order has been appealed before the Hon'ble Apex Court, no stay has been granted by the Hon'ble Supreme Court. He submits, therefore, that mere filing of appeals before the Hon'ble Supreme Court, without obtaining stay, is not a sufficient ground for keeping the appeals pending and that the Final Order cited above requires to be followed. He relies on the following cases:
Schneider Electric India Pvt. Ltd. vs. Commissioner of Service Tax, Delhi - (2023) 9 Centax 362 (Tri.- Chan) Pidilite Industries P. Ltd. vs. Collector of customs 1990 (50) E.L.T. 577 ( M/s Hindustan Zinc Ltd. v. The Commissioner, Central Excise and CGST, Commissionerate Final Order No. 50649-50661/2025 dated 13.05.2025 in Excise Appeal No. 51503 of 2022- CESTAT New Delhi HDFC Bank Ltd. v. Commissioner of Central Excise, Thane-II-2021 (44) G.S.T.L. 155 (Tri.- Mumbai) M.B. Anbarasan Factory vs. Assistant Collector of C. Ex., 1992 (60) E.L.Τ. 195 (Mad.) Century Enka Ltd. v. Collector of Central Excise & Customs, Pune 1994 (69) E.LT. 44 (Tribunal) Ecko Cables (P) Ltd. vs. Commissioner of Central Excise and Service Tax, Ludhiana Final Order No. 5 ST/60047/2018 & 03 others 60024/2024 dated 25.01.2024- CESTAT Chandigarh Kamakshi Tradexim (India) Pvt. Ltd. vs. Union of India 2016 (338) E.L.T. 528 (Guj.) Mohanlal Ghanshamdas vs. Collector of Customs, New Delhi 1987 (30) E.L.T. 1014 (Tribunal) Western Coalfields Ltd. vs. Commissioner of CGST & Central Excise, Nagpur 2023 (4) Centax 271 (Tri.- Bom.) Commr, of Cus. (Import), ACC, Mumbai vs. Airmid Aviation Pvt. Ltd. 2017 (370) E.LT. 1789 (Tri.-
Mumbai) Union of India v. Kamlakshi Finance Corporation Ltd. 1991 (55) E.L.T. 433 (S.C.) Shree Chamundi Mopeds Ltd. vs. Church of South India Trust Association - 1992 (3) SCC 1.
4. Learned Authorized Representative for the Department reiterates the findings of the impugned order in respect of the appeals filed by M/s Bharti Airtel Ltd. and the grounds of appeal in respect of Department's appeal.
5. Heard both sides and perused the records of the case. We find that the issue is no longer res integra being decided by this Bench vide the final order cited above. We find that this Bench has gone into the issue in a detailed manner and concluded the issue in favour of the appellants. This Bench finds that:
19. Heard both sides and perused the records of the case. Brief issue that requires to be decided in the instant appeal is whether the waiver from payment of telephone charges, given by the appellants to their employees, referred to as CFA is to be included for the purpose of calculating the service tax payable by the appellants. The appellants are discharging the applicable service tax on the amounts collected for the telephone services rendered by them to their employees. There is no dispute on this count.
We find that Department is of the opinion that the appellants are required to include the CFA also in the 6 ST/60047/2018 & 03 others service tax payable by the appellants. In certain cases, it is provided that allowance over and above the CFA is granted to the employees, of different grades, subject to the approval by their superior authorities. We find that as per the Bharati Airtel Ltd. Employee Phone Policy dated 05.09.2007, it is stated that:
1. ELIGIBILITY The policy is applicable to all employees of Bharti Airtel Limited (The Company). For the purpose of this policy, the following people are deemed to be 'employees':
Those who are on the employment rolls of The Company.
Selected relatives of those who are on the employment rolls of the Company (relatives defined as Parents / Children / Spouse / In Laws (Father and Mother In law) / Siblings) Employees of Bharti Group Companies"* *Only rates are applicable, CFA [call free allowance] not possible.
*Associate Employee - as per the Associate Phone Policy.
20. From the policy, it is clear that the CFA is permissible to the employees of Bharati Airtel Ltd. only. Learned Special Counsel for the Department tries to argue that the CFA is also extendable to the relatives of the employees where there is no employee-employer relation. It appears that the clarification given below the eligibility that only the rates applicable to CFA are applicable to relatives of the employees and employees of the Group Company but CFA per se to such relatives. Going by the scheme of the things, learned Counsel for the appellants submits that the CFA extended by the appellants to their employees is in the nature of a discount and that the appellants have discharged duty on the amounts collected by them and there was no law during the relevant period to consider the deemed value.
21. The appellant submits that in the instant case, the appellant is not receiving any consideration either in cash or in kind in respect of free calls made by the employees to a certain limit; Section 67 of the Finance Act, 1994 read with Rule 3(a) of the Service Tax (Determination of Value) Rules, 2006 provides for a situation where there is some 7 ST/60047/2018 & 03 others consideration flowing from the service receiver to the service provider and such consideration received by the service provider is not wholly or partly consists of money.
In the instant case, the appellant submits that there is no consideration received by the service provider i.e the appellant from the service receivers i.e the employees and their relatives over and above the amount charged; therefore, the demand of service tax is beyond the provisions of law.
22. The appellants rely on the Circular No.23/3/97- ST dated 13.10.1997. We find that the Circular clarifies as under:
"IV. Issue: Whether the companies are right in not paying service tax on the free telephone provided to their employees and friendly users from whom they do not recover any charges, but pay service tax only on line laying charges which represents value of calls made through the network other than cellular phone. Cellular telephone operators provides services to a category called "friendly users" which is mainly provided to its sister concerns and to their employees from whom they do not recover any air time charges and only recover "land line charges" which represents the value of the calls made
23. It is clear from the above that telephone service providers are required to pay service tax on the consideration received by them, the consideration being the gross amount charged; in this case, the gross amount charged by the appellant is the amount they collected from their employees and not the discount given to the employees in the form of CFA. We find that learned Counsel for the appellants relies on a number of cases, including that of M/s Bhayana Builders (supra) wherein the principle of law was settled to state that the value of goods or material supplied free of cost would not be included in the gross amount charged under Section 67. We find that this particular submission is not relevant to the facts of the case as there is no goods or material supplied free of cost by the service receivers to the service provider i.e the appellant. What is to be seen in the present case is whether the discount or free allowance extended by the appellants to 8 ST/60047/2018 & 03 others their employees is includable in the assessable value. In the scheme of the service tax taxation, includability of any amount in the gross amount charged for service requires to be the consideration flowing from the service receiver to the service provider. In the instant case, we find that it is the service recipient that is getting benefitted monetarily in the form of free allowance or discount and there is no flow of consideration from the service recipients to the service provider.
24. We find that learned Commissioner finds that the appellants are getting goodwill from the employees and that goodwill is the consideration received by the service provider/ appellant. We find that learned Commissioner observes that:
38(i). The assessee is providing call free allowance to its employees. The value of these charges, as per their policy, is at a reduced rate from market price. As per standing instructions, Annexure-15, the employees authorize the assessee to directly debit their monthly bills on account of telephone/mobile charges. The value of telephonic services provided by the assessee is worked out on the basis of monetary amounts. The CFA limit is also being fixed on the basis of monthly amounts. The charges in excess of CFA limit is deducted/adjusted from the salary of the employees and reimbursed to them when waived. It is the indirect method of charging the gross amount for the services provided by the assessee, The amount of CFA limit per month, which is not paid directly by the employees or recipients of service to the assessee is indirectly deducted/adjusted from their salary/Accounts. It is therefore wrong to contend that they are not receiving any consideration from the employees. Thus, the assessee is receiving the consideration in the form of indirect/unpaid perks included in the package of employees as incentives and they are receiving the services of the employees, who are doing the allotted work. The relatives of the employees of the assessee, the employees of Bharati group of companies and their relatives are also receiving free usage of telephone/mobile services up to certain limits it is not the case that assessee is providing this facility free of charge to others also. By providing its services to its employees and their relatives in the guise of CFA, the assessee has increased its volume of service and earned "goodwill" in the competitive market. Thus, taking services of the employees, providing them 9 ST/60047/2018 & 03 others telecommunication services vis-à-vis CFA is one of the consideration received by the assesses. Hence it is wrong to contend that they are not receiving any consideration from the employees and therefore, there is no justification in not paying service tax on taxable services provided to them. The value of CFA limit, not directly paid by the employees, is also not paid by the assessee to them along with their pay packages, but adjusted. The contention of the assessee that they have not received any payment in terms of Sec. 68(1) and Rule 6 of the Act & rules and liability to pay tax does not arise is not correct. As per Sec. 68(1) "Every person providing taxable service to any person shall pay service tax at the rate specified in section 66 in such manner and within such period as may be provided." Rule 6 provides the manner and period for payment of service tax. Section 68(1) was substituted by the Finance (No.2) Act, 1998 with effect from 16- 10 98. The assessee is the service provider and 'any person' in the section is the recipient of service, which includes the 'employees' as per the General Clauses Act. Thus, being a service provider, the assessee is liable to pay service tax. In Central Excise matters also the free samples supplied or gifted by the assessee are not exempt from levy of excise duty.
25. The appellants submits that goodwill cannot be termed as „consideration‟ and that supply of free telephone services up to certain limits to the employees does not create goodwill for the appellant. He further submits that there is no provision under service tax to consider goodwill as additional consideration and that TRAI also does not charge any license fee on the free services. We find that Tribunal in the case of Resonance Eduventures Pvt. Ltd. (supra) held that:
5. We have heard both the sides and perused the appeal record. The central point of dispute is whether the main appellant are correct in discharging Service Tax only on the amount received from the candidates who participated in the coaching classes without taking the consideration uniformly for all the candidates. In other words, whether the concessional rate of fee collected from certain category of candidates can be considered as a bona fide transaction eligible for treatment as gross value under Section 67 for tax purpose or not. We have perused a sample prospectus announcing the scholarship programme. It is clear that said scholarship programme is to extend concession in the course fee to a particular set of candidates listed therein. The nature of candidates is either based on their proficiency in particular field based on their qualification or being an old student of the main 10 ST/60047/2018 & 03 others appellants or brothers or sisters attending courses with the main appellant. It is apparent that this is a scheme to promote their business and it is notified to the public.
In terms of Section 67, the Service Tax liability will arise on gross value. In the present case, the appellants are not contesting their liability to pay Service Tax on the gross value on the amount whatever they received from the candidates. We find no reason to consider the concessional portion of fee which is as per the pre- declared publicity material, as part of non monetary consideration requiring addition to the monetary consideration to arrive at the gross value. We find no reason to invoke valuation rules in the present set of facts. There is no sustainable reason to reject the scheme publiHed by the appellants for fee concession as long as it is a bona fide trade practice. We could not find any reason to hold that the scheme is other than a bona fide practice. As this is the only dispute in the present appeals, we hold that the appellants will succeed on this point.
26. We find that it is not provided in the Service Tax law to amortize the goodwill to arrive at the gross value of consideration for the purpose of levy of service tax. It is not correct on the part of learned Commissioner to come to a conclusion that the appellants are receiving goodwill for the free telephone services provided to their employees. For the purpose of valuation of service tax, the goodwill cannot be taken into consideration. We find that learned Commissioner did not arrive at the value of the goodwill for the purpose of taxation, even if goodwill is considered to be an additional consideration. It is incorrect to take the entire free allowance given to the employees as monetary value of goodwill. We further find that arguments on the basis of goodwill were not part of the Show Cause Notice and the adjudicating authority sets up a new case in the impugned order. Therefore, we consider that the attempt made by the adjudicating authority has no legal basis. Moreover, the Department relies on the case of M/s BSNL (supra) to support their argument that even if there is an employer and employee relationship, services are to be taxed. We are of the opinion that this issue is not relevant to the impugned case. It is not the case of the Department that the appellant is not paying service tax on the consideration received from their employees towards the 11 ST/60047/2018 & 03 others telephony services rendered by them. In fact, the appellants are paying service tax on the same. Anyway, this cannot be the argument for including the free allowance in the assessable value of the service tax payable by the appellant.
27. Learned Counsel for the appellants agitates that in either case, non-monetary consideration was not taxable prior to 18.04.2006. He relies on Auromatrix Hotels Pvt. Ltd. (supra). We find that the Bench finds in the case that:
6.7 The Board vide Letter No. 334/4/2006-
TRU dated 28.2.2006, in para 8(1)(f) has clarified that the amendment to Section 67 proposes to include consideration received not wholly in terms of money. The same reads as under:- ―Substitute the existing section 67 with a new section67 to provide for determination of value of taxable service. At present, service tax is charged on the gross amount received. The proposed section provides determination of taxable value in cases where the consideration received for taxable services provided is not wholly in money terms and the consideration received is in money terms but not known explicitly. Separate valuation rules are proposed for this purpose‖. 6.8 In Vistar Construction (P) Ltd. Vs. Union of India reported in 2013 (31) STR 129(Del.), the Hon‟ble High Court of Delhi held that taxable event for service tax was rendition of service and that rate of tax applicable is the one on date on which services were rendered and not the rate on which payments were received. Since the amended Section 67 has come into effect only with effect from 18.4.2006, the immovable property which is part of consideration of Settlement Agreement dated 1.3.2006 would not be subject to levy of service tax.
28. We also find that in the Scheme of Service Tax, no liability to tax arises when consideration is not received and is not receivable. We find that Tribunal in the case of M/s S.I Group India Ltd. (supra) held as follows:
7. We have gone through the Technology Licensing Agreement. We find that under Article 5 technical services are indeed to be rendered to the appellants by way of training of personnel, selection of suppliers of machinery, for commissioning and testing of the plant and machinery as well as for testing of samples of products for inspection and examination by SSI. It is Article 7.2 which refers to payment of royalty.
It states that "in consideration of SII providing technical services to the Indian company, the Indian company shall pay to SII royalty at the rate of 4% on the Net 12 ST/60047/2018 & 03 others Sales subject to ......" We do not agree with the argument of the ld. Sr. Advocate that the service provided is Intellectual Property Service and service of Engineer Consultancy is not provided, notwithstanding the fact that the royalty is paid for such services which is determined on basis of Net Sales. It is well establiHed in law that measure of taxation does not determine the nature of taxation. But the pertinent fact of this case is that whereas the show cause notice was issued in September, 2003, the royalty on account of technical services for the years 2000-2001 and 2001-2002 was paid in 2004. This fact has been also certified by the Chartered Accountant and not controverted by Revenue. The Service Tax provisions under the Service Tax Rules, 1994, as applicable during the period in dispute, clearly provided that Service Tax is payable when the value of taxable services is received. The relevant provisions in law was Rule 6(1) which stated that Service Tax is payable when payments are received towards the value of taxable services. ------
29. We find that in the impugned case, Revenue has taken recourse to the best judgment method. Learned Counsel for the appellants submits that this method cannot be used because the conditions under Section 72 are not satisfied; as the Returns as per Section 70 were being filed regularly, provision of Section 72(a) cannot be invoked; Revenue has written a letter dated 17.04.2010 to the appellant seeking details of the transactions of the appellants all over India; the appellant vide their letter dated 20.04.2010 submitted that the same will be submitted after 25.04.2010. We find that the appellants were given too little a time to furnish the details and disregarding their letter dated 20.04.2010, Show Cause Notice dated 23.04.2010 was issued. We find that Revenue had sufficient time to call for the records of the appellants, consequent upon the issue of Show Cause Notices dated 21.08.2008 and 20.04.2009 to the Karnataka Circle of the appellants. The Department has waited till 17.04.2010, at least a clear one year and decided to write a letter. It is not fair on the part of the Department to take recourse to best judgment method, as a cover up to the delay that occurred on their side. We find that Tribunal in the case of Bluestar Communication & Others (supra) held 13 ST/60047/2018 & 03 others that the appellants not being given enough time for supply of data, recourse to best judgment method was not correct.
30. We further find that not only the legal premise on which the Department tries to establish the case but also the method of calculation/ computation of the tax liability was incorrect and erroneous. The demand was based on figures given by the appellant for the Bangalore Circle for the period from April 2006 to September 2009; the figure was divided by seven to arrive at a half yearly figure; such figure was then multiplied by three to obtain figure for one and half year; thereafter, such figure was multiplied by three times under the assumption that the work force of the appellants must have grown threefold because of the increase in business; finally, such figure has been multiplied by eighteen times to cover all the eighteen circles of the appellants. As can be seen the computation is totally based on assumptions as follows:
(i) Six months‟ turnover of each of the Circles was assumed to be 1/7th of the turnover of Karnataka Circle for a period of three and half years.
(ii) The number of employees must have grown three times.
(iii) Periodical turnover of all the Circles across India is equal.
(iv) Free allowance was also extended to relatives of the employees and to the other group companies.
31. We find that such approximation has no place in demanding and confirming service tax. A fundamental principle of taxation is that tax has to be levied and collected not a rupee more and not a rupee less; therefore, there is no scope for approximation. We find that learned Adjudicating Authority has an occasion to look at the Chartered Accountant certificated dated 14.02.2012, which indicated band- wise number of employees of the appellant and the group companies. The adjudicating authority has neither relied upon the Chartered Accountant certificate nor discarded the same with evidence. Such an approach is not acceptable. Understandably, Revenue cannot be expected to establish tax evasion with a mathematical precision. However, when it‟s come to computation, it can never be on the basis of 14 ST/60047/2018 & 03 others mathematical formulas and equations; it has to be on hard and factual figures. The assumptions that the number of employees is bound to grow over the years and that the turnover of all the Circles would be similar, border on fallacy. Such confirmation of demand cannot be accepted. We find that Principal Bench in the case of Shubham Electricals (supra) has held as follows:
11. Neither the show cause notice dated 21-10-
2011 nor the impugned adjudication order dated 18-1- 2013 record any assertion/conclusion whatsoever as to which particular or specific taxable service the appellant had provided. In the absence of an allegation of having provided a specific taxable service in the show cause notice and in view of the failure in the adjudication order as well, neither the show cause notice nor the consequent adjudication order could be sustained.
12. Shri Amresh Jain, learned DR would strenuously contend that Revenue was handicapped and crippled by the total non-cooperative attitude of the appellant which failed to respond in time to the several notices issued, failed to furnish the relevant transactional documents and to assist the adjudication process in its efforts to identify the specific taxable service provided by the appellant.
13. We have noticed earlier that the show cause notice itself adverts to the fact that the appellant had provided copies of 20 work orders executed in relation to CWG Projects, particulars of which are set out in a tabular form in para 5 of the show cause notice. From the description of the works in this table, officers could have classified the several works into the appropriate taxable service which may appropriately govern rendition of these services. In any event officers are not handicapped and the Act provides ample powers including of search under Section 82 of the Act to obtain information necessary to pass a proper, disciplined and legally sustainable adjudication order. The disinclination to employ the ample investigatorial powers conferred by the Act is illustrative of gross Departmental failure and cannot afford justification for passing an incoherent and vague adjudication order. The failure to gather relevant facts for issuing a proper show cause notice cannot provide justification for a vague and incoherent show cause notice which has resulted in a serious transgression of the due process of law.
32. In view of the above discussion, we find the following:
(i) Service tax cannot be levied when there is no consideration received. Free allowance given to the employees by the appellant is in the nature of discount/ concession and as the same has not accrued to the 15 ST/60047/2018 & 03 others service provider-appellant, the same cannot form part of the consideration for the purpose of levy of service tax.
(ii) Under the facts and circumstances of the case, Department has not made out any strong argument in favour of best judgment method.
(iii) Computation of service tax cannot be on the basis of assumptions and presumptions.
(iv) The Show Cause Notice is vague and does not specify the service which is rendered by the appellant; moreover, the benefit of discounts/ free allowance is accruing to the employees rather than the appellant who is the service provider. Consideration flowing onwards the service recipient cannot be included for the purpose of taxing the service provided by the appellant. (v) In view of (i), (ii), (iii)& (iv) above, the impugned Show Cause Notice and the impugned order cannot be sustained.
6. In view of the above, we allow the appeals filed by M/s Bharti Airtel Ltd. (Appeal No. ST/60047/2018, ST/60207/2018 & ST/60385/2018) as a corollary, Revenue's appeals No. ST/60333/2018 & ST/60285/2021 are dismissed.
(Order pronounced in the open court on 08/10/2025) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK