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M/s. Madhu Enterprises Versus C.C.E., Bhopal

Valuation of service - Includibility of warehousing and other reimbursables in the value of C&F agent service - Held that:- Madras High Court in the case of CCE, Chennai Vs. Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT] held that reimbursable expenses received by the assessee need not be added to the taxable value relating to clearing and forwarding agents service and that the receipt is for reimbursing expenditure incurred for the purpose and the mere act of reimbursement pe .....

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be includible in the taxable value (Service Tax Review 15 Sept. 2011 page 70). The reimbursable expenses in this case related to travelling expenses of a consulting engineer. In the wake of these judicial pronouncements, the CESTAT Larger Bench judgement in case of Shri Bhagavathy Traders (2011 (8) TMI 430 - CESTAT, BANGALORE) which had distinguished CESTAT judgement in case of Sangamitra Services Agency (2007 (7) TMI 33 - CESTAT, CHENNAI) has since been overtaken by Madras High Court judgement .....

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of which service demand of ₹ 1,36,728/- was confirmed along with interest [and equal amount of penalty was also imposed (although Section 78 of the Finance Act, 1994 was not mentioned in the order portion)] on the ground that the amount received on account of godown rent, staff salary & sample handling and freight charges was not included in the assessable value. The appellant has contended that the godown was taken on rent by it for warehousing the goods and the rent paid for such war .....

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ng and unloading, cargo handling and lorry freight were being reimbursed on the actual basis. 2. Ld. Departmental Representative on the other hand stated that warehousing and other reimbursables were in connection with providing C&F agent service and therefore were includible in the assessable value as the service tax is chargeable on the gross amount charged for the service rendered as per Section 67 of Finance Act, 1994. He cited CESTAT judgment in the case of Shri Bhagavathy Traders Vs. C .....

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ion to Misc. work they did for the service recipient like advisory work for filing sales tax returns, work relating to payments of bank drafts for tenders being filed by the service recipient procurements of space for its (i.e. recipient s) staff, procurement of drug license for it etc. which were not related to the C&F agent service rendered by them. 3. We have considered the contentions of both sides. We find that the issue of includibility of warehousing and other reimbursables in the val .....

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ble value of C&F agent service. In the case of Sangamitra Services Agency Vs. CCE, Chennai - 2007 (8) STR 233 (Tri.-Chennai), it was held that reimbursement of actuals towards freight, labour, electricity, telephone etc. are not includible in the assessable value of C&F agent service. Appeal against this judgement was filed before Madras High Court. Madras High Court dismissed Revenues appeal CCE, Chennai Vs. Sangamitra Services Agency 2014 (33) STR 137 (Mad.) and held that reimbursable .....

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