TMI Blog2008 (9) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... -9-2008 - Dr. S.L. Peeran, Member (J) and Shri T.K. Jayaraman, Member (T) Shri K.S. Ravi Shankar, Advocate, for the Appellant. Ms. Joy Kumari Chander, JCDR, for the Respondent. [Order per: T.K. Jayaraman, Member (T)]. - This appeal has been filed against Order-in-Original No. 78/2007 dated 8-8-2007 passed by the Commissioner of Service tax, Bangalore. 2. The appellant M/s. Rolex Logistics Pvt. Ltd. are engaged in the activities of 'Management Consultancy Service'. In April 2004, they had taken over the operations of two proprietary firms namely M/s. Rolex Logistics International and also M/s. Rolex Computer Services. Revenue proceeded against the appellants on the ground that they had suppressed the value of the taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Held, reimbursements of expenses are not subject of service tax. 2. B.S. Refrigeration Ltd. v. C.S.T.- 2006 (4) S.T.R. 103 (T) Held, demand of Service tax on entire amount reimbursed not sustainable. 3. Glaxo Smithkline Pharmaceuticals Ltd. v. C.C.E. - 2006 (3) S.T.R. 711 (Tribunal) 2005 (188) E.L.T. 171 (T) Held, Service tax not leviable on expenses recovered. 4. Malabar Management Services P. Ltd. v. C.S.T. - 2008 (9) S.T.R. 483 (Tribunal) - 2008 (12) V.S.T. 133 (T) Held, amount received as reimbursement of staff salaries and infrastructural expenses not includible in value of taxable services. 5. Basti Sugar Mills Co. Ltd. v. C.C.E. - 2007 (7) S.T.R. 431 (T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongly defended the impugned order and stated that the appellants are liable to pay Service tax. 5. On a very careful consideration of the issue, we find that there are several decisions of this Tribunal and other Tribunals which hold that reimbursements cannot be subjected to Service tax. What is a reimbursement? When a service provider provides service to a service receiver or a client, on behalf of his client he incurs various expenditure and these expenditure are all for different purposes. The Service Tax liability in terms of Section 67 is only on the gross amount received towards the services rendered. If the service provider in the course of rendering service has to make certain payments on behalf of the service receiver, they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Finance Act regarding the deductions from the gross receipt as held out by the learned Commissioner (A). According to the Commissioner (A) there is no provision for deductions on account of reimbursement and whatever gross amount is charged by the service provider, the same is liable for Service tax. This approach is not at all correct. In all the decisions relied on by the learned advocate, it has been clearly spelt out that the reimbursements are not subject to Service Tax. 6. We find that the Show Cause Notice is based on the balance sheet and other documents maintained by the party, therefore, appellants have also been regularly paying Service tax and also filing the required returns. Therefore, there is no evidence to show th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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