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2019 (8) TMI 212 - AT - Service TaxValuation - Clearing and Forwarding Agent Service - inclusion of charges received as reimbursement on the expenses, in the assessable value - demand of service tax on Franchisee Service? - HELD THAT:- From the sample agreement shown by the Ld. Counsel between the appellant and the service recipient it is observed that there is a separate amount of only service charges for CFA service and some actual amount payable by the service recipient to the appellant on account of various expenses. There is a fixed amount on the quantum of sale towards remuneration for ‘CFA’ service. From the agreement it is seen that there is a separate charges for the service of ‘CFA’ and there are additional charges towards the various expenses which appellant has to undertake on behalf of their client, therefore, the remuneration for the ‘CFA’ service is clearly identified all other charges are paid as reimbursable charges by the service recipient. Since, the other expenses are incurred as per the instruction of the service recipient the same is reimbursed on actual basis by the service recipient to the appellant - Therefore, these charges are over and above the remuneration in respect of ‘CFA’ service and it is not towards the service of ‘CFA’ as a reimbursement of expenses. Therefore, it cannot be said that the reimbursable expenses is part of the service charge of ‘CFA’. This issue has been considered by the Hon’ble Supreme Court in the judgment cited by the appellant in the case of COMMISSIONER OF SERVICE TAX, CHENNAI, TAMIL NADU VERSUS M/S MALABAR MANAGEMENT SERVICES PVT. LTD. [2019 (7) TMI 1161 - SC ORDER], where it was held that reimbursement of salary and infrastructure expenses not be termed as amount charged towards the service provided by the service provider. Therefore, since the details of all reimbursable charges on the agreement needs verification and the matter needs to be remitted back to the adjudicating authority to ascertain the facts regarding the remuneration towards the service and reimbursable expenses and accordingly re-quantify the demand, if any arise. Demand of service tax on Business Auxiliary Service - HELD THAT:- As per the appellant’s submission he has raised that one of the service is franchisee for which service tax liability is on the franchisor and not on the franchisee i.e. the appellant, however, we do not find anything, as regard, the franchisee in the impugned order - The impugned order is only on the issue of reimbursable expenses and Business Auxiliary Service i.e. incentive received from Tata Chemicals and courier service, since, there is a contradiction between the submission made by Ld. Counsel and the finding given in the impugned order, these issues are also needs to be re-considered. Appeal allowed by way of remand.
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