TMI Blog2024 (4) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that period, they have paid the Service Tax and filed their Returns at Mumbai. In the present case, Kolkata Revenue officials did not have the jurisdiction to demand the Service Tax amount when Service Tax was paid at Mumbai and Returns were being filed over there. In view of the same, the confirmed demand of Rs. 51,43,753/- for the period 2004-2005 and 2005-2006 is legally not sustainable. We set aside the impugned Order and allow the Appeal to this extent. Service Tax paid/payable during the period 2006-2007 - HELD THAT:- The Agreement very clearly specifies that the consideration to be paid to the Appellants are under different headings and they were to be re-reimbursed the direct cost incorporated by them. Accordingly, they have engaged PP Enterprises and for the payment made to them, the Appellants have raised Debit Note for getting the re-imbursement from ABP. This exact amount paid by Appellant to PPE is being reimbursed by ABP. It is found from Annexure C of the Show Cause Notice that Re-imbursement payment is not included in the Trial Balance . This shows that this amount is not being treated as part of the income (consideration) by the Appellant. Therefore, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07, the Appellant started raising invoices independently from Kolkata Branch Office in respect of services provided from Kolkata Branch Office and started discharging applicable Service Tax on the taxable service provided. The Kolkata Branch Office also started filing the periodical Service Tax Returns for Kolkata Branch separately with the jurisdictional Service Tax authority at Kolkata. (iii) ABP Private Limited, (hereinafter referred to as ABP ) is engaged in the business of, inter alia , publishing newspapers and magazines in India through a distribution network and subscription program for its various publications. (iv) In Kolkata, the Appellant executed an agreement on 16.06.2004 with ABP Private Limited ( ABP ) to provide start to end advertising solution, encompassing not only the designing of a subscription program but also managing such program with the objective of enabling ABP to increase its subscription base. ABP is engaged in the business of publishing newspapers and magazines in India through a distribution network and subscription program for its various publications. In the said agreement it was categorically mentioned in clause (d) of para 1.2.1 that the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Service tax Determination of Value Rules, 2006. (ix) The Appellant submits that for managing the manpower supplied by M/s. P. P. Enterprise for the operations of ABP, the Appellant received consideration in the form of agency commission, to the extent of 7.65% of the direct cost as per SCHEDULE - 1 of the agreement dated 16.06.2004. The bills raised by M/s. P. P. Enterprise to the Appellant were reimbursed by ABP in terms of SCHEDULE - 1 of the agreement dated 16.06.2004. The Appellant submits that there is no dispute regarding payment of service tax on the agency commission component to the extent of 7.65% of the direct cost. (x) The Appellant submits that it raised separate invoices for the agency commission and reimbursement of expenses respectively. (xi) Firstly , the reimbursement of expenses, as claimed by the Appellant from ABP was on back to back basis and there was no mark-up which is also evident from the summary of Debit Notes raised on ABP vis- -vis Bills raised by M/s P. P. Enterprise to the Appellant [Refer Page No 51, 76 104 of the Written Notes on Arguments] (xii) The Appellant submits that inclusion of reimbursement of expenses in the gross amount charged is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere registered under Mumbai Jurisdiction with Service Tax Registration AABCD9380QST001. They were filing all their Returns with their Jurisdictional authorities. Further all the values obtained and used for quantification of demand have been derived by the Department from their Balance Sheet, Trial Balance and Profit Loss Account as can be seen from Annexure C to the Show Cause Notice. (Page 74 of the Appeal Paper Book). The Agreement entered into with ABP clearly states that the Appellant would be reimbursed the amount incurred on behalf of the client. It is on record that they have claimed the exact amount as reimbursement from ABP. Since the reimbursed amounts are not liable for Service Tax, the Appellants have not paid the Service Tax on such reimbursements. Considering that such interpretation was also approved by the Hon ble Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. Vs. UOI Anr, case [2012 (12) TMI 150-Delhi High Court], no suppression can be alleged against the Appellant. In view of these facts, the Learned Chartered Accountant submits that the confirmed demand for the extended period is required to be set aside on account of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly indicating the Service Tax payable, Service Tax paid and short payment of Service Tax. For the period 2004-2005 and 2005-06, they have held that no Service Tax is paid for the period 2006-2007. They have taken into account the Service Tax paid by the Kolkata unit and have arrived at the short payment of Service Tax. It is seen from the record that the Appellants were not registered at Kolkata during the period 2004- 2005 and 2005-2006 towards the billing done during this period. The Appellants have provided all the Service Tax details to the Department for the transactions carried out by Mumbai Unit. During that period, they have paid the Service Tax and filed their Returns at Mumbai. 9. The transactions were carried out by Mumbai Unit under their Service Tax registration and even the payment of Service Tax for normal consideration (without making any payment for reimbursed amount) has been made there. Therefore, if any demand is to be made towards the reimbursed amount, it was for the Jurisdictional official of Mumbai to do so, since this valuation dispute would pertain to Mumbai unit only. 10. Hence, we hold that in the present case, Kolkata Revenue officials did not have the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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