Customs, Excise and Gold Tribunal - Bangalore
Keralam Enterprises And Sree Mayura ... vs The Commissioner Of Central Excise, ... on 15 October, 2007
Equivalent citations: [2008]12STJ255(CESTAT-BANGALORE), 2008[9]S.T.R.503
ORDER S.L. Peeran, Member (J)
1. These three appeals raise a common question of law and facts and hence they are taken up together for disposal as per law. The Commissioner (Appeals) has dismissed the assessees' prayer for non-inclusion of handling charges and secondary freight in the taxable value. Their contention was that these charges are not subjected to Service Tax. However, their prayer was not accepted.
2. The learned Chartered Accountant submits that the elements, which the Revenue has directed the appellants to add in the total services, are not includible and the issue has been gone into in great detail by this Bench and other Benches and the assessees' contention has been upheld. The following rulings are relied by the Chartered Accountant and he submits that the very issue involved in these matters has been decided in assessees' favour.
(i) Bhagyanagar Services v. CCE, Hyderabad 2007 (6) STT 460(Bang.-CESTAT)
(ii) E.V. Mathai & Co. v. CCE 2007 (7) STT 189(Bang.-CESTAT)
(iii) Marakadham Agencies v. CCE, Salem 2007 (6) STT 384(Chennai-CESTAT)
(iv) Alathur Agencies v. CCE&C, Calicut 2007 (5) STR 383(Tri.-Bang.)
(v) Popular Cement Traders v. CCE, Cochin 2007 (5) STR 384(Tri.-Bang.)
(vi) T.N. Co-op Milk Producer's Federation Ltd. v. CCE, Chennai 2007 (5) STR 227(Tri.-Chennai)
(vii) Sri Sastha Agencies Pvt. Ltd. v. AC,CE&C, Palakkad 2007 (6) STR 185(Tri.-Bang.)
3. The learned JDR submits that the assessees are not entitled to claim deductions, as the total value of taxable services includes all other elements which the assessees are claiming for deduction. The assessees were acting as C & F Agents and they received certain amount as reimbursement from their Principal viz. M/s. KRPL. He submits that as per Section 65(25) of the Finance Act, C & F Agent is defined as "Any person who is engaged in providing any service either directly or indirectly in connection with C & F operations in any manner to any person and includes a consignment agent." Therefore, the value of taxable service in relation to the services provided by a C & F Agent to a client for rendering services of C & F operations in any manner shall be deemed to be the gross amount of remuneration or commission paid to such agent by the client engaging such an agent. He submits that therefore, the impugned orders are correct and the judgments are rightly distinguished by the Commissioner. He prays for dismissal of all the three appeals.
4. The learned Chartered Accountant submits that the value of taxable services is defined under Rule 6(8) of the Service Tax Rules. It defines that "Value of taxable service in relation to the services provided by Clearing and Forwarding Agent to a client for rendering services of clearing and forwarding operations in any manner shall be deemed to be the gross amount of remuneration or commission (by whatever name called) paid to such agent by the client engaging such agent." Therefore, various receipts pointed out by the department like loading and unloading charges, freight charges, telephone charges, postage charges, courier charges, printing charges, Photostat charges, stationery, computer parts/software, expenses to clear old bar, repacking charges, traveling charges, internet charges cannot be added for payment of remuneration or commission. This is the point decided in the cited judgments and, therefore, he submits that the calculation arrived at by the department including these charges is not correct and required to be deducted. They have paid service tax correctly on the commissions received.
5. We have carefully considered the submissions and find that the issue has been decided in the cases of Shri Sastha Agencies Pvt. Ltd.; E.V. Mathai & Co; Bhagyanagar Services and other judgments cited supra. The Service Tax has to be charged only on the gross commission received and the elements on which the service tax is being taxed is not correct and proper in the light of the above judgments.
6. The impugned orders are not legal and proper. Respectfully following the ratio of the cited judgments, the impugned orders are set aside and the appeals allowed with consequential relief, if any.
(Pronounced and dictated in open Court)