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2016 (8) TMI 14 - CESTAT BANGALORE

2016 (8) TMI 14 - CESTAT BANGALORE - TMI - Valuation - inclusion of value towards reimbursement of expenses - extended period of limitation - whether certain elements like freight charges and other expenses reimbursed by the principal to the appellants are to be included in the value of taxable service of C & F or not? - Held that:- We have found enough truth and justification in the pleadings of the appellants that the demands under consideration are time barred, when the subject show-cause not .....

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mischief of provisions of Section 73(4) of the Finance Act, 1994. - When we have held above that subject demands are time barred, we are not further discussing the issue of liability of service tax on the amounts categorised as reimbursable expenses by the appellants and whether these reimbursable expenses have to be treated as part of value of taxable service of C & F Agency service. - Demand set aside - Decided in favor of assessee. - ST/235-236/2006 - Final Order No. 20530-20531 / 20 .....

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. The subject matter in these two appeals is common and the issue is whether certain elements like freight charges and other expenses reimbursed by the principal to the appellants are to be included in the value of taxable service of C & F or not? . 2. Both the appellants viz., M/s. Raja s Enterprises and M/s. Rajvinayaka Pharmaceuticals are engaged in providing C & F Agency Services to their respective clients. They have been paying service tax as C & F Agent which has been defined .....

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enses out of their own pocket on behalf of their clients. 2.1 The appellants viz., M/s. Raja s Enterprises have mentioned that they have been paying service tax in respect of the commission received from their client viz., M/s. Duphar-Interfran Limited, Bombay and other expenses were duly reimbursed by their client viz., M/s. Duphar-Interfran Limited. These expenses are like telephone, internet, printing and stationery, etc., subject to maximum limits incurred on behalf of service receiver to me .....

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mand is time barred. 2.3 In the case of the appellants, M/s. Rajvinayaka Pharmaceuticals also, it is pleaded that show-cause notice was issued on 29.3.2005 for the period of 1.9.1999 to 30.3.2003, which is beyond the normal period of one year and therefore entire demand is time barred. 3. Both the appellants were represented by the learned CA, Shri Rajesh Kumar, who further pleaded as below: * As per Section 73, show-cause notice has to be issued within one year from the relevant date, therefore .....

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ra 6.6 of the said trade notice out of pocket expense reimbursed on actual basis are not subjected to service tax. 4. Revenue has been represented by learned AR, Shri Parashiva Murthy. He reiterated the findings given by the lower authorities. He further pleaded that both the appellants have artificially split up the subject expenses, which are part of C & F Agent s service provided by them to their clients and which are in the category of reimbursable cost and deserve to be included in the .....

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to 31.3.2003 and in case of the appellant viz., M/s. Raja s Enterprises, show-cause notice is dated 30.3.2005 and in case of second appellants viz., M/s. Rajvinayaka Pharmaceuticals, show-cause notice is dated 29.3.2005. In both these cases, the show-cause notices were issued after the expiry of the normal period of one year. In order to issue a valid show-cause notice for the period which is beyond one year, it is legally necessary that the Revenue brings out on record that there has been shor .....

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visions of Chapter V of the Finance Act or of the rules made thereunder with an intent to evade payment of service tax by these appellants or their clients in respect of the demands of service tax under consideration. The subject amounts on which the Revenue issued show-cause notice(s) demanding service tax have been categorised by the appellants as reimbursable expenses which are not to be included in the value of taxable service of C & F Agent s Service. But the Revenue says that the said .....

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