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2019 (1) TMI 1118 - AT - Service TaxTime Limitation - Valuation - Consulting Engineering Services - deduction of reimbursement and accommodation charges - Held that:- A show-cause notice has already been issued to the appellants on 15.10.2004 on the issue of admissibility of deduction of reimbursement and accommodation charges. The department is well aware of the working model of the appellants. The appellants have also been submitting returns from time-to-time along with challans and bills. Therefore, invoking extended period is not justifiable in this case. On perusal of para 7 of the show-cause notice, it is seen that the show-cause notice states that the earlier show-cause notice was on the actual expenses incurred and reimbursed and not the once raised in the present show-cause notice. However, para 6 of the show-cause notice states that the word ‘gross amount’ has been used to emphasize the fact that no deductions will be allowed in respect of any expenditure incurred by the consulting engineer. Therefore, it cannot be stated that the two show-cause notices are different and a new and emergent situation has arisen for invoking the extended period. Therefore, the contentions in the impugned show-cause notice and the orders as far as it relates to accommodation and other charges reimbursed, the department is not correct in extending the period of limitation. Valuation - inclusion of Withholding tax / TDS - appellants claim that the same were not collected by the appellant and it was merely added and deducted in the invoice for accounting purposes in the invoice. Therefore, it cannot be considered as part of taxable value - Held that:- The Order-in-Original also did not give any findings on the same specifically. One more issue which is agitated in the impugned order is about whether the exemption contained in the Notification No.2/1999 dated 28.2.1999 is applicable to the appellants. The Ld. Commissioner (A) has contended that it is seen that as per the agreement is entered into between NHAI and he appellants in joint ventures with Consulting Engineers Group Ltd. Jaipur, the appellants are main party to the agreement and by no stretch of imagination they can claim themselves as sub consultants. Therefore, no abatement can be available. Receipt of remuneration in freely convertible foreign currency - Held that:- It is not understood as to how Commissioner (A) has come to a conclusion that the same has been repatriated as no clear findings have been given on this issue. However, as per discussion above, a show-cause notice on the same issue being already issued to the appellants and the appellants submitting the returns along with bills and challans regularly, we find that department has not made a case for invoking the extended period. We are not looking into the above issue of includability of TDS and withholding tax and the exemption claimed by the appellants on freely convertible foreign exchange. However, while holding that accommodation and other reimburse charges are not includable in the assessable value of taxable service, we find that the entire show-cause notice is barred by limitation. The impugned order is set aside partly on merits and totally on limitation.
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