TMI Blog2011 (4) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee by way of remand - ST/Appeal No.637/2007 & ST/Appeal No. 652/07 - - - Dated:- 13-4-2011 - Ms Archana Wadhwa, Mr.Mathew John, JJ. Appeared for the Appellant: Shri A.K. Batra, Advocate Appeared for the Respondent: Shri K.K. Jaiswal, SDR ORDER Per Mathew John: The Appellant in Appeal No. ST-637/2007 was providing clearing and forwarding services to M/s Whirlpool India Ltd during the period April 2001 to September, 2005. The Appellant was receiving payment shown as commission/ service charges from M/s Whirlpool India Ltd. Apart from this the Appellant was also receiving amounts from M/s Whirlpool India Ltd under different heads like service charges for employees, freight for distribution/transportatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember, 2005. Interest as applicable under Section 75 of the Finance Act, 1994 was also demanded. Further, there was a proposal for imposing penalty under Section 76 and 77 of the Finance Act, 1994. The show cause notice was adjudicated vide order dated 3.4.07 which confirmed the tax liabilities demanded under the show cause notice along with Section 75. Further penalties were imposed under Sections 76, 77 and 78 of the Finance Act, 1994. 4. Aggrieved by this order, the appellant filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide his order dated 3.7.07, set aside the demand of service tax on transportation charges, inward/outward charges, freight charges, godown rental charges and salary for clerks. On ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring and forwarding operations in any manner to any other person and includes a consignment agent 8. The provision regarding value on which tax was to be paid was contained was in 67 of Finance Act, 1994 which read as under:- For the purposes of this Chapter, the value of any taxable service shall be the gross amount charged by the service provider for such service rendered by him Rule 6 (8) of Service tax Rules , 1994. The Value of the taxable service in relation to the services provided by a 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in Malabar Management Services Pvt Ltd Vs. CST 11. The learned DR on the other hand, argues that as per Section 67 of Finance Act 1994, the value of any taxable service was to be gross amount charged by the service provider for such service. He basically invites attention to Rule 6 (8) of Service Tax Rules, 1994 which made it very clear that value in relation to the services provided by clearing and forwarding agent to a client for clearing and forwarding operation in any manner shall be gross amount of commission by whatever name called, paid to such agent by the client engaging such agent. 12. The learned DR states that by calling the consideration received by different names, it cannot become a reimbursable expense. In the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rule 6(8) of the Service Tax valuation Rules,1994. The provisions of Rules should get precedence of clarifications issued by CBEC and that too in relation to other matters. The essential criteria to decide whether amounts received from a person availing service will be part of value of service should be the criteria laid down by this Tribunal in the case of Naresh Kumar and Company Ltd (Supra). The Appellant could not have provided the service of C F agents without employing clerks or having a telephone in his office. Even if these expenses are separately billed to the client, the expenses will form part of the value of taxable service. However, cost of transportation is on a different footing. Transportation is a service provided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Abatement from gross receipts received shall be allowed for these expenses also subject to production of vouchers for such expenses. 16. In the case of godown rent, there can be a dispute because the godown might be actually hired by M/s Whirlpool and the Appellant is paying the rent as an agent present on the spot. However, if the godown is taken on rent by the Appellant for discharging his obligations under the contract, rent for godown will form part of the value even if it is reimbursed separately by the client. 17. To sum up the matters relating to transportation charges, pre-dispatch inspection charges, octroi and detention charges needs re-examination by the adjudicating authority. To enable such examination the M/s M/s H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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