TMI Blog2023 (6) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... ow and paid the service tax on these service charges collected. Hence, the demand confirmed in the impugned order on this count is upheld. Documentation charges - handling charges - DO charges and other direct reimbursements - HELD THAT:- The Appellant had produced sample invoices and after verifying the same the adjudicating authority has accepted their contention in respect of those 40 entries in the order-in-original. The appellant stated that since the data is huge and bulky, from the year 2002-03 to 2006-07, they requested the Adjudicating Authority to depute an officer to the Appellant s premises to verify the remaining invoices, in case he has any doubt about the nature of reimbursements in respect of the remaining entries and submitted a worksheet containg all reimbursements. This fact has been recorded in the impugned order by the adjudicating authority . Therefore, it is not open to the Adjudicating Authority to confirm the demand on the ground that all invoices have not been produced. The issue as to whether reimbursable expenses are liable to be taxed or not is settled by the decision of the Hon ble Supreme Court in the case of UOI Vs. Intercontinental Consultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NICAL) Shri J. Chattopadhyay, Authorized Representative for the Appellant/Revenue Shri Ms. Radhika Chandra Sekhar, Advocate for the Respondent/Assessee ORDER The Appellant is engaged in providing Custom House Agent (CHA) and freight forwarding services. They are registered under service tax and discharging service tax on the service charges received. A Show Cause Notice dated 17.10.2007 was issued to the Appellant proposing to demand service tax on various receipts accounted in their books of account, but no service tax has been paid, for the period 2002-03 to 2006-07. The Notice was adjudicated vide Order-in-Original dated 30.01.2009, wherein the Adjudicating Authority has set aside the demands pertaining to some services namely (a)Pickup charges (b) Import consol air (c) Import consol sea(d) Export consol air and (e) Export consol sea and confirmed the levy of service tax in respect of some services such as Air freight commission, Sea freight commission, Service Charges, Documentation charges, airport/port truck charges, and other direct reimbursements GE India Industrial (P) Ltd.etc. 2. The Department filed appeal against the demands which were set aside de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m their statutory auditor. 6. The demand on Air Freight commission and Sea freight commission was confirmed on the ground that the Appellant had agreed to pay service tax and they have already paid the same and the demand is sustainable. The Appellant stated that this observation of the adjudicating authority in the impugned order is not correct as they have contested the levy and not agreed that there were liable to pay service tax on these charges. 7. The Ld. DR reiterated the findings of the adjudicating authority in the impugned order. 8. Heard both sides and perused the appeal records. 9. We will now examine each of the demands confirmed and dropped on the basis of the submissions made by both sides. 10. Air Freight Commission: 10.1 The Appellant has undertaken booking of cargo space on various airlines. These were meant for export of goods. For this activity they received commission from the airlines. It is the contention of the Appellant that this service was rendered in connection with export of goods and therefore, no service tax will be leviable on such services. 10.2 The Appellant stated that the issue is squarely covered by the decision in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.3 The Appellant stated that for DO charges and other direct reimbursements, as against 6813 entries shown in the statement, they have produced invoices with supporting documents for 40 entries. The adjudicating authority has dropped service tax of Rs.10,938/- pertaining to these 40 entries after verifying the invoices with supporting documents. It is their submission that having verified the sample invoices and being satisfied with the nature of reimbursements, the Adjudicating Authority ought to have dropped the service tax demand instead of confirming the balance demand of Rs.1,06,78,548/- under the said head on the ground that mere submission of worksheet or statement is not enough for proper quantification of service tax liability . 12.4 We observe that the Appellant had produced sample invoices and after verifying the same the adjudicating authority has accepted their contention in respect of those 40 entries in the order-in-original. The appellant stated that since the data is huge and bulky, from the year 2002-03 to 2006-07, they requested the Adjudicating Authority to depute an officer to the Appellant s premises to verify the remaining invoices, in case he has any dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereupon. 24. In this hue, the expression such occurring in Section 67 of the Act assumes importance. In other words, valuation of taxable services for charging service tax, the authorities are to find what is the gross amount charged for providing such taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service cannot a part of that valuation as that amount is not calculated for providing such taxable service . That according to us is the plain meaning which is to be attached to Section 67 (unlamented, i.e., prior to May 01, 2006) or after its amendment, with effect from, May 01, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasized that Rule 5 of the Rules went much beyond the mandate of Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider for such service and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25. This posit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to be taxed. 14.2 We observe that the Notice has proposed to levy service tax on these charges under the category of C F agency services. The OIO has confirmed the levy under CHA services. Thus, we observe that the impugned order has travelled beyond the Show Cause Notice and hence the demand confirmed on this count is not sustainable. 15. On the issue of limitation, the Appellant contended that the Show Cause Notice was issued for the period 2002-03 to 2006-07. The Notice was issued on 17.10.2017, by invoking the extended period. As there was no suppression involved, the demands confirmed by invoking the extended period not sustainable. We observe that the Appellant has been discharging service tax with respect to the service charges received. 15.1 We observe that the dispute is with regard to non inclusion of reimbursable expenses as well as value of taxable services. The Appellant contended that they were under the bonafide belief that reimbursable expenses and the ocean freight / air freight are not includable in the taxable value. We observe that there were confusion regarding inclusion of reimbursable expenses in the taxable value. Finally, The Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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