Custom, Excise & Service Tax Tribunal
M/S.Sai Shipping Service vs Cce, Jaipur-Ii on 30 December, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:26.12.2016
/Decision:30.12.2016
Service Tax Appeals Nos.1096-1097/2011
[Arising out of Order-in-Appeal No.19(CB)ST/JPR-II/2011 dated 20.01.2011 in Appeal No.E/1096/2011 and Order-in-Appeal No.20(CB)ST/JPR-II/2011 dated 20.01.2011 in Appeal No.E/1097/2011, passed by the Commissioner of Central Excise (Appeals), Jaipur-II]
M/s.Sai Shipping Service Appellants
Vs.
CCE, Jaipur-II Respondent
Appearance:
Rep. by Shri Karan Sachdev, Advocate for the appellant. Rep. by Shri Ranjan Khanna, DR for the respondent. Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Member (Technical) Final Order No.56183-56184/2016 Per B. Ravichandran:
These two appeals dealing with the same issue are taken up together for disposal.
2. The appellants are engaged in providing Customs House Agent services to various clients in clearing export/import consignments. During the course of providing such service, they incurred various expenses like documentation charges, examination charges, communication and courier charges, crane charges, etc. These expenditures were reimbursed by the clients to the appellant. Revenue entertained a view that all these considerations are to be added for taxable value and service tax should be discharged on such gross value. Accordingly, proceedings were initiated to recover the short paid service tax, which resulted in confirmation of various service tax amounts for the period April, 2005 to March, 2007.
3. Ld. Counsel for the appellant submitted that they incur these various expenses connected to their services as CHA and these are paid by the clients. Service tax is not payable on such reimbursable expenditure as held by the Honble Delhi High Court in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. Vs Union of India - 2013 (29) STR 9 (Delhi). In fact, the Honble Delhi High Court held that by including the expenditure and costs in the taxable value, Rule 5(1) of Service Tax Valuation Rules goes beyond the Charging Section of the Finance Act, 1994. The said Rule was held ultra vires of the Act. He also submitted that the Tribunal in various cases, including their own case for the earlier period, held that such expenditure cannot be included in the taxable value.
4. Ld. AR reiterated the findings of the lower authorities and submitted that the appellants did not produce sufficient documentary evidence for claiming such re-imbursable expenditure.
5. We have heard both the sides and perused the appeal records.
6. We note that various expenditures, as narrated above, were incurred by the appellant on behalf of their clients. They are getting paid/reimbursed these expenditures. While they are discharging service tax on the CHA commission/charges, the above expenditures were not added for the tax purposes. We note that in the appellants own case reported in 2011 (22) STR 153 (Tribunal-Delhi), reimbursable expenses were held to be excluded from the taxable value. Similar decision were arrived at by the Tribunal in the case of Aashita International Ltd. Vs. CST, Ahmedabad - 2015 (38) STR 246 (Tribunal-Ahmd.); Suraj Forwarders - 2016 (42) STR 843 (Tribunal-Ahmd) and by Honble Madras High Court in Sangamitra Services Agency 2014 (33) STR 137 (Mad.).
7. Considering the above settled legal position and following the decision of the Tribunal, in the appellants own case as well as in other cases, we find no merit in the impugned orders. Accordingly, the same are set aside. The appeals are allowed.
[Order pronounced on 30.12.2016] ( Justice Dr. Satish Chandra) President ( B. Ravichandran ) Member (Technical) Ckp.
1ST/1096-1097/2011