TMI Blog2016 (6) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... der in his capacity as pure agent, such amounts shall not form part of the gross turnover liable to tax - further proper findings have not been recorded as to the exact nature of receipts and as to deductibility - matter on remand. Penalties u/s 76 and 78 - Held that: - it is not a case of deliberate default, as the appellants have paid substantially the amount of taxes and there appears to be interpretational issue in regard to gross amount taxable - also, there was a dispute amount the Directors of the Pvt. Ltd. company, which finally lead to the closure of the business in February, 2008 - penalties set aside. Appeal allowed by way of remand. - ST/70097/16 - ST/A/70230/2017-CU[DB] - Dated:- 21-6-2016 - Mr. Anil Choudhary, Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission received from M/s Vodafone, Lucknow Rate of S.Tax, Ed.Cess, Higher Ed.Cess (%) Amt of S.Tax, payable Amt of Ed. Cess payable Amt of Sec., Higher Edu.Cess, payable S.Tax Paid by the Party Total S.Tax liability 2005-06 658741 10% +2% 65,874 1317 - 14543 52848 2006-07 376506 12% + 2% 45181 904 - - 46085 2007-08 532026 12% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reimbursement is concerned, rejected the claim observing as follows: - However, it is the point of the Appellant that the amount of demand is inclusive of the amount of reimbursement of expenses; that the service tax is payable only on the Commission and not on the expenses; that the short paid service tax corresponds to the amount of reimbursement of expenses FOS. It is, thus, the prime point to be deliberated upon, as to whether or not, the amount of reimbursement FOS were actually and correctly covered under the demand in the case. (5.3) The Appellant has submitted the copy of Appellant's statement of account' in the books of Vodafone, which is stamped by the Zonal Office of Vodafone Digilink Ltd., Lucknow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts of reimbursement' FOS'. However, as already stated, the terminologies used in the said of statement of account' are cryptic which do not come up with clear sense, in which they are used. It is, thus, important to first test out as to whether the amounts, which the Appellant has described as the amounts of reimbursement or FOS', are actually so, or not. In order to clarify this point, I have gone through the Tele Shop Agreement between the Appellant and their original Principal M/s Aircel Digilink India Ltd. (i.e. M/s ADIL). I notice that in view of the terms of agreement M/s ADIL was not to make any reimbursement etc. of Rent , Salary , Marketing or of anything, per se, to the Appellant. Few ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, as may be felt adequate and desirable by M/s ADIL, on the strength of a regular employment letter, however, the wages of such employees would be the responsibility of the teleshop owner. This makes clear that no salary or wages were to be reimbursed by M/s ADIL to the Appellant; (iv) Point no.-6(a) of the Operating Manual' is very categorical in this context as it prescribes that the teleshop owner shall carry out all his obligation at his own cost and expenses, including but not limited to usage of his own space and personnel, expenses on consumption of electricity, water all taxes that may be applicable from time to time etc., and no reimbursement, whatsoever, shall be made ADIL to the teleshop owner on any ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments available on record, particularly the Tele Shop Agreement', indicate that no reimbursement was made to the appellant, and whatever amount was received by the appellant, in whatsoever name, was actually the Commission', in lieu of their services. 4. Heard the parties and perused the records. So far the first issue is concerned regarding the liability of tax for the turnover achieved by the Pvt. Company Ltd. in the hands of this appellant, I hold that appellant is not liable to tax for such turnover achieved by the Pvt. Ltd. Company, M/s Tiems Telecom Pvt. Ltd. on and before 14/2/08. So far the second issue is concerned as regards deduction of certain payment received by the appellant as a reimbursement, Section 67 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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