TMI Blog2017 (9) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - there was a dispute among the Directors of the Pvt. Ltd. company, which finally lead to the closure of the business in February, 2008 - penalties set aside. Appeal allowed in part and part matter on remand. - ST/70097/2016 - ST/A/70230/2017-CU[DB] - Dated:- 17-2-2017 - Shri Anil Choudhary, Member (Judicial) Shri T.K. Srivastava, Advocate, for the Appellant. Shri D.K. Deb, Asstt. Commissioner (AR), for the Respondent Order The appellant (a proprietorship concern of Preeti Kulshreshtha) being a service provider (w.e.f. 14-2-2008) under the category of Business Auxiliary Services , is in appeal against order-in-appeal dated 10-8-2015. The issue in this appeal is (i) whether the appellant is liable to pay service tax on the turnover achieved by Tiems Telecom (P) Ltd. (a company) having separate Service Tax registration number; and (ii) whether the appellant is entitled to deduction for reimbursement of certain expenses from the principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short paid along with interest and further penalty proposed under Sections 70, 76 and 78 of the Act. Pursuant to remand by the Commissioner (Appeals) in the earlier round of litigation de novo order of adjudication was passed dated 24-7-2014. The appellant had claimed that they are not liable for service tax prior to 14-2-2008 which issue has been left undecided as per observation in the order in appeal, that the said ground was not pressed. Upon reconsideration, the adjudicating authority allowed credit of ₹ 1,21,825/- out of the total demand and confirmed the balance demand of ₹ 1,06,450/-. Being aggrieved the appellant preferred the appeal before the Id. Commissioner (Appeals), who vide the impugned order dated 10-8-2015, insofar as the issue of non-taxability of receipts in the nature of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 relevant clauses of said 'Tele Shop Agreement' in this regard, are as under - (i) It is mentioned at point No. 1.2.1 of the 'agreement' that the teleshop owner should have the requisite infrastructure for opening and running the teleshop. Further, the succeeding point No.1.2.2 states that the title of said premises should be in the own name of the teleshop owner. In view of that, it comes out that there is no question of paying the rent of such premises because such premises, being in the own name of teleshop owner, is the property of such teleshop owner ('Appellant, in the case') : (ii) Point No. 3 of the 'teleshop agreement' (which describes about the payments to be made by M/s. ADIL), with exclusive emphasis on sub-clause No.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich may establish that any 'reimbursement' was actually made to them. The appellant, in their written statement dated 28-4-2015, has given a point that the 'statement of account' of Vodafone clearly states that no service tax was paid by the company on reimbursement of expenses, hence tax demand cannot be raised on the entire amount. However, I find that in the entire length of said 'statement of account', no amount is mentioned in the name of service tax, hence it is not understandable as to why the appellant has given such point which is manifestly contradicted by the referred document itself. In any case, the documents 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 turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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