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2019 (9) TMI 531

..... certain expenditure but he has not given any specific finding on each of the reimbursable expenses viz. Godown rent, damage allowance, loading charges and demurrage charges - Further, all these expenses were reimbursed by the appellant for the various purposes incurred for carrying on the business of C&F Agent Service. The impugned order to the extent of Service Tax on reimbursement is liable to be set aside - appeal allowed - decided in favor of appellant. - ST/408/2009-DB - Final Order No.20711/2019 - 12-9-2019 - HON'BLE MR. S.S GARG, JUDICIAL MEMBER AND HON'BLE MR. P. ANJANI KUMAR, TECHNICAL MEMBER Mr. M.S. Nagaraja, Advocate For the Appellant Dr. J.Harish, Joint Commissioner (AR) For the Respondent ORDER Per : S.S GARG The p .....

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..... r set aside the demand of Service Tax on TDS and on reimbursement of certain expenditure but the Learned Commissioner has, however, not recorded the finding on the specific submissions dated 25.09.2008 for exclusion of reimbursement of expenses towards Godown Rent of ₹ 13,83,944/-, Damage allowance of ₹ 4,68,408/- and loading/demurrage charges of ₹ 89,774/- in the value of C&F Agent Service for levy of Service Tax. Hence, the present appeal. 3. Heard both the parties and perused the records. 4. Learned Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without giving any specific finding on each of the reimbursable expenses. He further submitted that the on .....

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..... position that the expenses incurred by the service provider and reimbursed by the service receiver are not liable to be included in the value of taxable service. Therefore, the reimbursement of expenses like Godown rent for storage and cement belonging to ACC, damage allowance towards damage to the cement bags and handling and demurrage charges in connection with transportation of goods not being consideration for C&F Agent Service are not includable in the value of taxable service. He further argued that this issue is no more res integra and has been settled by the Hon ble Apex Court in the case of UOI Vs Intercontinental Consultants and Technologies Pvt. Ltd. [2018 (10) GSTL 401 (SC)] wherein it has been held that the reimbursement of .....

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..... n 76 is not sustainable in law. 5. On the other hand, Learned AR defended the impugned order. 6. After considering the submissions of both the parties and perusal of the material on record, we find that the only issue involved in the present case is whether the reimbursable expenses are to be included in the value of service of the C&F Agent. Further, we find that the Commissioner (Appeals) though has set aside the demand on TDS and on reimbursement of certain expenditure but he has not given any specific finding on each of the reimbursable expenses viz. Godown rent, damage allowance, loading charges and demurrage charges. Further, we find that all these expenses were reimbursed by the appellant for the various purposes incurred for car .....

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..... cted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with consideration is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the Learned Counsel for the Department that Section 67 is a declar .....

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