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M/s. Sindhu Cargo Services Ltd. Versus CST, Chennai

2018 (2) TMI 944 - CESTAT CHENNAI

Valuation - includibility - reimbursement of certain expenditure incurred on behalf of the clients - Held that: - Regarding exclusion of reimbursement expenses, it is clear that the said exclusion can be allowed on satisfactory proof of documents specifically to the effect that these are on actual basis as per the arrangement between the client and the appellant. This can be easily verified with the supporting documents to be submitted by the appellants - Admittedly, the documents were not fully .....

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cate, for the Appellant Shri A. Cletus, ADC ( AR ) for the Respondent ORDER Per : B. Ravichandran The appeal is against order dated 24.06.2009 of the Commissioner of Service Tax, Chennai. The appellant is in the business of Custom House Agent and Freight Forwarders. They were registered with the department and were discharging service tax on their activities. The officers conducted verification of accounts maintained by the appellants. After such verification it was noticed that for the financia .....

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eir clients. Here also similar dispute arose regarding non-inclusion of various expenses/receipts in the taxable value. On these two issues proceedings were initiated and the original authority confirmed the service tax liability of ₹ 98,08,647/- along with penalties on the appellants. 2. The Ld. Counsel appearing for the appellant submitted that upon scrutiny of the account maintained by them, the officers were satisfied with the accounts for the financial year 2002-03 to 2005-06, for the .....

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and later reimbursed. They are not to be included in the taxable value at the hands of the appellant. Only based on certain mismatch of such reimbursement, the Revenue considered all receipts not to be eligible of reimbursements. He submitted that the confirmation of tax liability based on Rule 5 of Service Tax Valuation Rules, 2006 is not tenable as the said Rule 5 (1) itself has been set aside as ultra vires of the Act by the Hon ble Delhi High Court in Intercontinental Consultants & Tech .....

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these receipts. 3. The Ld. AR submitted that exclusion from taxable value can be only with reference to actual reimbursement of expenditure which otherwise should have been incurred by the clients. This position has been repeatedly held in various decisions of the Tribunal as well as High Courts including Hon'ble High Court of Madras. However, when the appellant could not satisfactorily prove that these are in fact reimbursement expenses, the original authority is correct in confirming the t .....

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