TMI Blog2015 (11) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... lump sum payment towards reimbursible as well as service charges, service tax would be charged on 15% of the gross value only. In the clarification, it was stated that with the introduction of Valuation Rules for service tax, the previous circulars become invalid. The period covered by the orders before us is prior to April 2006. Therefore the guidelines issued by CBEC would be squarely applicable to the facts of this case. Appellant has taken registration as a CHA has been discharging service tax liability on that basis and the activities undertaken by the appellant are the ones which have been taken note of by the CBEC. Even in the case of clearing and forwarding agent also, the Tribunal had taken a view that reimbursement on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iring of barges as well as warehousing, standardization and despatch of goods. It was also observed that appellant company was rendering clearing and forwarding services, steamer agent service, port service and cargo handling service but had taken out registration only for CHA services. On the basis of income in balance sheet, the service tax liability was calculated and notice was issued. After the adjudication process, it has been held that the services provided by the appellant is to be classified as clearing and forwarding services in view of the fact that as per provisions of Section 65A(b) of Finance Act, 1994 when composite service is provided, the service which gives essential character would be the one under which the composite ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F Agent offers services to clear the goods from the manufacturers/traders premises. He also submits that he relies on the decision in the case of Intercontinental Consultants Technocrafts Pvt. Ltd. Vs. UOI [2013(29) STR 9 (Del.)] to submit that reimbursable expenses cannot be included for arriving at the value of the service. He also relies upon several other decisions to submit that the services rendered by him are only that of CHA and not C F Agent service at all. 3. Learned AR submitted vehemently that the activities undertaken by the appellant are that of a clearing and forwarding operations. He submits that the appellant is getting the goods cleared from customs and forwarding it to the principal and appellants have also got g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out of various statutory and other formalities such as payment of expenses on account of octroi, destuffing/pelletisation, terminal handling, fumigation, drawback/ DEEC processing, survey / amendment fees, dock fees, repairing and examination charges, landing and container charges, statutory labour charges, testing fees, drug control formalities, sorting / marking / stamping / sealing on behalf of the exporter / importer. The Custom House Agent also incurs various other expenses such as crane / fork lift charges, taxi charges, photostat and fax charges, bank collection charges, courier service charges, and miscellaneous other expenses on account of the exporter / importer. For all the above charges, the CHA is ordinarily reimbursed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpsum amount charged to the client. The Custom House Agents are required to show the service charges as 15% of such lumpsum amount of the bills and Service Tax of 5% will be chargeable on the above 15%. It is the claim of the appellant that they have paid service tax on this basis. Further, in Circular No.119/13/2009-ST dated 21.12.2009, CBEC had clarified the position. In fact the Trade Note is based on the circulars. In paragraph 3 of the said Circular, it was observed and reported that Board had clarified on 6.6.1997 that service tax would be charged on the service charges only and statutory levy and other reimbursable charges would not be included in the taxable value. The Board also observed that in case where there is lump sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of reimbursement. It was also submitted that the transportation from the godown to various places was under a separate agreement and not part of the agreement on the basis of which the activities within the port were undertaken. The only ground the Commissioner has refused to exclude the reimbursable expenditure is that it got merged in the consolidated pre-agreed rate as per the agreement. We find that the Board circular issued and referred to above clearly covered the case of the appellant. 4.4 Moreover, the liability of CHA to service tax was considered by the Tribunal. In the case of S K Enterprises vs. CCE, Calicut, this Tribunal had held that commission received for C F activity alone is taxable and reimbursement on account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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