Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2012 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 564 - AT - Service TaxEligibility for exemption under Notification No. 12/2003-ST, dated 20.6.2003 – reimbursement expenses - Held that:- As the respondent was not merely acting as a Commission Agent but was also doing business promotion activity, the reimbursements of expenses of the staff employed by the respondents were being given is clearly not covered by the definition of commission agent in Notification No.12/2003-ST. So this issue is answered in favour of the Revenue. Taxability of the consideration received as reimbursable expenses – Held that:- Without employing manpower the respondents could not have provided the service in question. The case laws on "reimbursable expenses" developed around expenses incurred by Clearing and Forwarding agents for godown rented out for keeping the goods of the principal and freight paid for forwarding the goods. These essentially do not form part of the value of the services of C&F agents. Now such decisions are being further interpreted to argue that any amount like wages of the personnel employed by the service provider, the telephone expenses incurred by the service provider, office rent of the service provider etc. will not form part of the value if billed as reimbursable expenses. This matter has been examined by a Larger Bench of the Tribunal in the case of Sri Bhagavathy Traders v. CCE [2011 (8) TMI 430 - CESTAT, BANGALORE] the ratio laid down in that decision would apply and service tax has to be paid on value inclusive of such amounts even if billed as reimbursements. In the matter of Misc. expenses like Registration fees for label or brand, the expenses is not for providing the service being provided by the respondents. So if there is any proof of such expenses incurred by the respondent and reimbursed by SBL, such reimbursed amount will not form part of gross value of services. Similar is the case of transportation expenses paid by respondents on behalf of the SBL. The respondents are not in the business of organising or doing transportation. Transportation is not part of business promotion activity. So actual transportation cost reimbursed will not form part of value of service rendered by the respondents. Invoking section 80 – Held that:- A person giving his own interpretation of notification and then arguing that he was under the bona fide belief cannot get the protection of such section 80 - as the adjudicating authority did not give the option of paying 25% of the duty demanded within 30 days of the order for discharge of the liability imposed as penalty the matter is remanded to the adjudicating authority for calculation of penalty payable based on rulings given above - there is no need to impose penalties under Section 76 when penalty is imposed under Section 78.
|