TMI Blog2013 (5) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... t be included in the taxable value for demanding Service tax. Likewise other amounts received also were paid to the concerned persons and were not retained by the appellant and hence the demand of Rs. 60,418/- is not sustainable. Consequently no interest and penalty are also demandable. - Order-in-Appeal No. 113/2011 (MST) - - - Dated:- 6-7-2011 - Shri P. Ayyam Perumal, J. Shri V. Ravindran, Advocate, for the Appellant. None, for the Respondent. ORDER This appeal has been filed by M/s. Sukhvarsha Management Service Pvt. Ltd., Chennai-17 (hereinafter called the appellant) who are engaged in the business of recruitment and supply of personnel of their clients. They have branches at Secunderabad, Bangalore, Pune and Kolkata f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod from January, 2007 to April, 2008) was issued under proviso to Section 73(1) of the Finance Act, 1994 and also charging interest under Sec. 75 of the Finance Act, 1994 besides proposal for imposing penalties under Section 76 and 78 of the Finance Act, 1994 was issued to the appellant. Interest of Rs. 34,479/- towards interest on the delayed payment of Service Tax under Section 75 of the Finance Act, 1994 (for the period from May, 2005 to July, 2008). After due process of law, the LAA confirmed the proceedings initiated in both the show cause notices after dropping the proposal for penalty under Section 76 of the Finance Act, but gave an option to the appellant that the penalty imposed under Section 78 would be 25%, if the payment of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses incurred by the service providers and no penalty is imposable when the service tax is paid prior to issue of show cause notice. The impugned order has deviated from the above settled position of law and hence not maintainable in law, to that extent; (iii) that the demand of service tax of Rs. 60,418/- for the period from Jan., 2007 to April, 2008, in respect of reimbursable expenses incurred by appellant on behalf of M/s. Hutchison Essar South Ltd., Chennai relating to (i) Office Rent, (ii) Furniture Rent, (iii) Broadband connection charges, (iv) Electricity Bill (v) Computer hiring charges, (vi) other office expenses like printing charges for visiting cards, Boarding/lodging, Interior Decoration etc., is totally in conflict with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects. There is no dispute that the amount received from the clients i.e. M/s. Hutch and M/s. Zenta was reimbursable amount as the show cause notice itself admits. It is settled law that the principle of taxation is to tax only on the consideration received and retained. In the instant case various expenses incurred during the course of business activity were paid to the persons concerned. For example there cannot be second opinion that amount paid TNEB cannot be included in the taxable value for demanding Service tax. Likewise other amounts received also were paid to the concerned persons and were not retained by the appellant and hence the demand of Rs. 60,418/- is not sustainable. Consequently no interest and penalty are also demandable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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