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TMI Blog2017 (3) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, in July, 2011, proceedings were initiated against the respondent for short payment of service tax during the period 2006-07 to 2009-10. 3. The main allegation against the respondent is that they have rendered, as customs house agent, various services to the clients (importers/exporters) and collected various service charges. They have not included these service charges in the gross value for discharging service tax under CHA service. The various charges which are sought to be included in the taxable value are B/L, DDC charges, GOH container charges, Inland haulage charges, on carriage charges, THC, Via Charges, APT tax, AWB fee, AWC charges, MYC Charges, PCA Charges, X-ray charges etc. It is the case of the Revenue that these amounts should form part of the gross taxable value for service tax purpose under the category of Custom House Agent Service. The second allegation is that, the respondent received brokerage and commission from various airlines, shipping lines, freight forwarding companies for providing various cargo related services. These brokerage and commission amount is to be considered as a commission received for promoting clients' business and are accordingly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction claimed towards such reimbursable expenditure is not allowable. Similarly, for the tax under BAS, he submitted that the respondent acted on behalf of airlines/agents in booking cargo and thereby promoting their business. The Commission received is liable to tax. 6. The ld. Counsel appearing on behalf of the respondent submitted that the respondent acted as a CHA for importers and exporters. While discharging the said duties, it is necessary to undertake a liaison work with various connected agencies like Port Trust Packers, transporters, warehouse owners inspection agencies, crane operators etc. They undertake all these work and the amount spent on these agencies were reimbursed from the clients (importers and exporters). These are on actual basis and there is no evidence of any mark-up in collecting these charges. The Revenue proceeded merely on the presumption based on difference in expenditure and income in the balance sheet of the respondent. The Original Authority has correctly analyzed the legal as well as factual position and accordingly dropped the demand. 7. Regarding the brokerage or commission received from airlines or agents, the ld. Counsel submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were contained in the invoices raised to their client. Moreover, it is also evident that such expenses are identified and indicated separately by nomenclature and by amount therof. Such expenses and the amounts thereof indicate that they have been charged form their clients under respective headings/ categories/ nomenclatures, while undertaking the job of CHA services. I also find that the remaining component constituting agency charges/ service charges etc. were subjected to payment of service tax. Hence it is now clear that the said reimbursable expenses were provided while providing CHA services to their clients. Hence it is also inherent to understand that the clients/ service recipients were required to make the payment for taxable services along with service tax and also of reimbursable expenses; hence, it is not the case that the service recipient is not aware of given component as existing in the invoices. Hence, I find that the requirement of agreement between the assessee and the service recipient to substantiate the plea of reimbursable expenses is inherent; hence, existence or non- existence of exclusive formal agreement does not cause any hurdle in considering the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been placed on record. Hence, I find that the allegations are of no consequence affecting the benefits of reimbursable expenses accruable to the assessee." 9. Against the above categorical finding on facts, we note that the appeal by Revenue did not bring out any contrary evidence to persuade as to vary the said findings. Further, we also note that the reliance placed by the Revenue on the Provisions of Rule 5 (1) of Valuation Rules is of no consequence. In any case, we also note that the said Rule is found to be ultra vires of the main statutory provision for valuation under Finance Act, 1994 by the Hon'ble Delhi High Court in Intercontinental Consultants and Technocrats Pvt. Ltd. vs. Union of India - 2013 (29) STR 9 (Delhi). 10. We also note that the Tribunal in CST Vs, Lee & Muirhead Pvt. Ltd. - 2012 (26) STR 249 (Tri-Chennai), Aspinwall & Co. Ltd. Vs. CCE, Mangalore - 2011 (21) STR 257 (Tri-Bang.) & Suraj Forwarders Vs. CST, Ahmadabad - 2016 (42) STR 843 (Tri- Ahmd.) had occasion to examine the includibility of reimbursable expenditure in the taxable value for CHA service. It is held that when amounts are reimbursed on actual basis, the said charges are not to be includ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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