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2019 (1) TMI 512 - CESTAT MUMBAIValuation - eligibility for deduction - expenditure incurred on salary and wages, provident fund etc. for providing the taxable service from October 2010 - pure agent - rule 5(2) of Service Tax (Determination of Value) Rules, 2006 - Held that:- It is clear from the ‘job order’ that appellant is responsible for discharge of all statutory requirements devolving on an employer. In this situation, the requirements enumerated in rule 5(2) of Service Tax (Determination of Value) Rules, 2006 have not been complied with as found in the order of first appellate authority. The proposition that rule 5(2) has no existence except in conjunction with rule 5(1) of Service Tax (Determination of Value) Rules, 2006 is not convincing as the condition precedent, i.e. ‘subject to’ does not reduce one to that of dependent of the other. In the absence of rule 5(1), the expression ‘subject to’ in rule 5(2) is rendered superfluous and the rest standing on their own - The claim of the assessee does not find merit in the absence of any justification to be compliant with the description of ‘pure agent’ as defined in the Rules. The appeal of M/s Swarupananda Enterprises is allowed on the substitution of penalty under section 78 with that under section 76 - deduction of expenses not allowed - demand of tax and imposition of penalties, as upheld by first appellate authority, is sustained except that penalty under section 76 for the period from October 2010 to March 2011 is set aside - appeal allowed in part.
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