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M/s Plantech Consultants Pvt. Ltd. Versus Commissioner of Central Excise, Pune-I

2015 (11) TMI 1356 - CESTAT MUMBAI

Adjustment of excess payment of service tax with short payment - prescribed procedure of intimation to superintendent not followed - valuation - inclusion of reimbursement of expenses - held that:- Any expenses, which is reimbursed in connection with the provision of Consultancy Engineering Services should not be included in the gross value of taxable services. From the records and documents produced by the appellant, reimbursement portion and services charges of the services are clearly and dis .....

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e Courts in the cited judgments have clearly held that reimbursement of various expenditures incurred by the service provider should not be included in the gross value of service. Respectfully following ratio of judgments cited by the Ld. Counsel and as per our above observations, we are of the considered view that reimbursement shall not be taxable and demand on such reimbursement is not sustainable.

Even though appellant have not specifically intimidated to the Superintendent in thi .....

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cannot be permitted to be retained by the government. The only option is either to refund that amount or allow adjustment. In our view, the adjustment is very appropriate and favourable to Revenue as compared to the refund. - Adjustment is legal - Decided in favour of assessee. - Appeal No. ST/02/11 - Final Order No. A/3619/2015-WZB/STB - Dated:- 13-10-2015 - P. S. Pruthi, Member (T) And Ramesh Nair, Member (J) For the Appellant : Shri S Naryanan, Adv For the Respondent : Shri B K Iyer, Superin .....

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appellants had recovered the Traveling expenses, Hostel accommodation and Telephone charges etc incurred for visit to the site of their customers for collection of inputs and providing on-site services, by issue of separate bills over and above the taxable amount charged for the services rendered. The appellant, therefore, contravened the provision of Section 67(3) of the Finance Act, 1994 and Rule 5(1) and 5(2) of the Service Tax (Determination of Value) Rules, 2006. The service tax short paid .....

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r delayed payment of service tax dues. On the above observations a Show Cause Notice dated 6/11/2009 was issued which was adjudicated vide Order-in-Original dated 26/8/2010 and the demand proposed in the show cause notice was confirmed into and also imposed penalty and demanded interest. Being aggrieved by the order-in-Original, the appellant preferred appeal before the Commissioner (Appeals) who has upheld the Order-in-Original and dismissed appeal of the appellant. Aggrieved by the impugned or .....

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al expenses; that it is the only gross value towards the provision of services are taxable, whereas in the present case the reimbursable expenses are over and above the service charges and it is nothing to do with provision of services, it is not part and parcel of gross value of services provided, therefore same is not liable for service tax. He referred to Trade Notice No. 53/97 dted 4/7/1997 wherein in para 4.5 it was clarified that in case of Consulting Engineer, gross amount charged to the .....

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Visakhapatnam-I [2008 (10) S.T.R. 611 (Tri.Bang)] (b) Reliance Industries ltd. vs. Commissioner of Central Excise, Rajkot [2008 (12) S.T.R. 345 (Tri-Ahmd.)] (c) Commissioner vs. Reliance Industries Ltd. [2011 (23) S.T.R. J226 (S.C.)] (d) Mckinsey & Company Inc Vs. Commissioner of C. Ex. & Cus. Mumbai [2007 (6) S.T.R. 420 (Tri.Mumbai)] (e) Rolex Logistics Pvt. Ltd. vs. Commissioner of Service Tax, Bangalore [2009 (13) S.T.R. 147 (Tri.Bang)] (f) C.J. Shah & Co. vs. CCE, Rajkot [2015(3 .....

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h of August, 2006, he submits that Ld. Commissioner has upheld the demand on this count on the basis that the appellant has not complied with procedure inasmuch as they have not intimated the details and reasons for such adjustment to their Jurisdictional Superintendent within the period of 15 days from the date of such adjustment as prescribed in sub Rule 4(b) of Rule 6 of Service Tax Rules. He submits that it is not correct to say that said procedure has not been followed for the reason that f .....

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alem, SRC projects Ltd. [2010 (20) S.T.R. 687 (Tri.Chennai)] (c) Commissioner of C.Ex, New Delhi vs. Sentinel Security (P) Ltd. [2001 (134) E.L.T. 806 (Tri.Del)] (d) General Manager, B.S.N.L. vs. Commissioner of C.Ex, Raipur [2015 (39) S.T.R. 278 (Tri.Del)] (e) General Manager, Telecom, BSNL vs. CCE, Raipur [2015 (38) S.T.R. 1182 (Tri.Del)] (f) Jubilant Organosys Ltd. vs. Commissioner of C.Ex, Meerut - II [2015 (38) S.T.R. 1230 (Tri.Del.)] (g) Aneja Construction (I) Ltd. Vs. Commissioner of Serv .....

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on that Ld. Commissioner has rightly denied the adjustment and upheld the demand on this count for the reason that the condition prescribed in sub-rule 7 of Service Tax rule 1994 has not been complied with by the appellant as it is mandatory that appellant should have intimated to the Jurisdictional Superintendent regarding such adjustment within 15 days from the date of adjustment. The appellant failed to do so, therefore demand on this count is sustainable. 5. We have carefully considered the .....

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the gross amount charged to the client for services rendered in relation to the recruitment of manpower excluding the amount incurred in the manpower recruitment agency n behalf of the client towards expense which are reimbursed on actual basis and in case the client is titled on lump sum basis any deduction from the same on account of reimbursable expenses, for the purpose of determining the value of taxable services shall be permitted on the basis of documentary evidence adduced by the agency. .....

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the reimbursement of various expenses. Evan as per the Valuation Rules, it is the gross value of the taxable services which shall be chargeable to the service tax. Gross value of taxable could not be interpreted in a manner by which other expenses which is over and above the distinct services charges can included in the gross value. This Tribunal and Hon'ble Courts in the cited judgments have clearly held that reimbursement of various expenditures incurred by the service provider should not .....

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eproduced below: "4(A) Notwithstanding anything contained in sub-rule (4), where an assessee has opted for registration under sub-rule(2) of rule 4 these rules and has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, for the reason of not receiving details of payments received towards the value of the taxable services at his other premises of offices, the assessee may adj .....

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