2013 (7) TMI 862 - MADRAS HIGH COURT

Valuation - Gross value - Reimbursable expenses received by the assessee need not be added to the taxable value related to clearing and forwarding agents service - Rule 6(8) of Service Tax Rules, 1994 stipulates that Gross amount of remuneration or commission should be the taxable value in relation to the services provided by a Clearing and Forwarding Agent – Held that:- Various expenditure includible in the taxable value of Carrying and Forwarding service were reimbursed by the principals on the basis of actuals – Relying upon the judgment in the case of Sri Sastha Agencies Pvt Ltd., Vs. Asst. Commissioner reported in 2006(11)TMI 193- CESTAT, BANGALORE, wherein it is held that no element other than remuneration received by a Clearing & Forwarding agent from their principal was to be included in the taxable value of the service. In the instant case, it is difficult to hold that the gross amount of remuneration/commission would nevertheless include expenditure incurred by the assessee providing the services; that all incidental charges for running of the business would also form part of the remuneration or Commission (by whatever name called). The phrase "by whatever name called" must necessarily have some link or reference or nature to the receipt of remuneration or commission. Thus, if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration / Commission - Rejecting the Revenue's contention – Decided in favor of Assessee.