Custom, Excise & Service Tax Tribunal
M/S. A.P.R. Agencies vs Commissioner Of Central Excise, ... on 16 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
ST/153/2010
(Arising out of Order-in-Revision No. 11/2009 ST (R) dated 17.12.2009 passed by the Commissioner of Central Excise, Madurai)
M/s. A.P.R. Agencies Appellant
Vs.
Commissioner of Central Excise, Madurai Respondent
Appearance Shri S.S. Thakur, Authorized Rep. for the Appellant Shri Arul C. Durairaj, Superintendent (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision: 16.01.2018 Final Order No. 40120 / 2018 Per Bench The appellants are partnership firm rendering clearing and forwarding services. They are registered with the Service Tax Department for the said category of services and are discharging service tax on various services. In September 2004, the Preventive Unit visited the premises of the appellant and verified documents. Statements were also recorded. Consequent to investigation, show cause notice was issued demanding service tax for the period September 1999 to June 2004 invoking extended period of limitation. It was alleged that the appellant not only collected commission towards C&F service but also collected some amount towards reimbursement of certain expenses incurred by them on behalf of the clients. That appellant had paid service tax only on the commission collected and had not included the reimbursable expenses for discharging the service tax liability. After adjudication, the original authority confirmed the demand, interest and also imposed penalties under section 78 of the Finance Act, 1994. In appeal, Commissioner (Appeals) remanded the issue to the adjudicating authority for fresh adjudication with specific direction to analyze whether the reimbursable expenses are to be included in the total value of taxable service and also to verify as to whether demand is unsustainable on the ground of limitation and also to quantify the penalty after ascertaining the cause of failure on the part of the appellant. The Commissioner (Appeals) in the said order had recorded in his findings that expenses reimbursed towards freight, octroi and salary are not includible in the value of services in denovo proceedings. The adjudicating authority relying upon the decisions of the Tribunal in various cases dropped the proceedings holding that the reimbursable expenses are not includible in the taxable value of services. Notice was issued under section 84 of the Finance Act, 1994 by the Commissioner invoking revisionary powers. In such revisionary proceedings, the demand was confirmed along with interest and also imposed equal penalty under section 78 of the Finance Act. Aggrieved the appellants are before this forum.
2. After hearing both sides, we find that the issue whether reimbursable expenses are includible in the taxable value of services stands settled by the decision of the Honble High Court of Madras in the case of Commissioner of Service Tax, Chennai Vs. Sangamitra Services Agency 2014 (33) STR 137 (Mad.). Further, the Tribunal in the case of Solaimalai Properties (P) Ltd. Vs. Commissioner of Central Excise, Madurai vide Final Order No. 42954/2017 dated 17.11.2017 has held that actual expenses with mark-up are not to be included in the taxable value of services for discharging service tax liability. Following the said decisions, we are of the view that the demand is unsustainable. The impugned order is set aside and the appeal is allowed with consequential relief if any.
(Operative portion of the order was
pronounced in open court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S.)
Member (Technical) Member (Judicial)
Rex
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