TMI Blog2024 (5) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... e hold that the expenses received are towards rendering of C F service and the appellant is liable to pay service tax on these reimbursable expenses. The Larger Bench, CESTAT, Bangalore in the case of SRI BHAGAVATHY TRADERS VERSUS COMMISSIONER OF CENTRAL EXCISE, COCHIN [ 2011 (8) TMI 430 - CESTAT, BANGALORE-LB] held that reimbursable expenses received in connection with rendering of service in respect of C F agent services are includable in the assessable value. Thus, these reimbursable expenses collected by the appellant are includable in the gross value for the purpose of charging service tax under the category of C F agent service. Extended period of limitation - HELD THAT:- The appellant have taken registration and paid Service Tax on the commission received by them and accordingly filed returns immediately upon being notified about their liability. The Show Cause Notice has not brought any evidence regarding mens rea on the part of the appellant to evade payment of Service Tax. The allegation of wilful mis-statement and suppression of facts with intent to evade payment of Service Tax needs to be established with positive evidence. However, it is observed that no such evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges received from M/s. L T. 4. A Show Cause Notice dated 28.09.2004 was issued to the appellant demanding Service Tax of Rs.4,91,324/- for the period from September 1999 to March 2001 and September 2003 to March 2004. 5. The Notice was adjudicated by the Ld. Assistant Commissioner vide Order-in-Original dated 31.03.2011 wherein he confirmed the Service Tax demand of Rs.4,91,324/- along with interest and appropriated an amount of Rs.1,17,862/- deposited by the appellant before adjudication of the case. He also imposed a penalty of Rs.3,73,462/- under Section 78 of the Finance Act, 1994 and Rs.5,000/-under Section 77 of the Act. 6. On appeal, the Ld. Commissioner (Appeals) vide the impugned order upheld the demands confirmed in the Order-in-Original dated 31.03.2011. 7. Aggrieved against the confirmation of demands in the impugned order, the appellant has filed the present appeal. 8. In their submissions, the appellant stated that they were not aware of the Service Tax liability on C F agent service rendered by them; that they had no intention to evade payment of Service Tax. It is submitted that upon realizing that they were liable to pay Service Tax, they had immediately paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is the valuation for the purpose of demanding Service Tax on the C F agent service. In the present case, we observe that the appellant has rendered the following chain of activities on behalf of their principal: - (i) C F: Unloading of cement from wagon to platform. Loading of cement from platform to trucks. Local transportation from railway siding to godown. (ii) S D: Unloading of cement at godown. Loading of cement from godown to the trucks for delivery. 11.1. From the above, it is clear that the appellant has been rendering the service of lifting, receiving, loading and unloading of goods as per the directives of the principal, which are all covered under the category of C F agent service. 12. In their submissions, the appellant contended that the charges collected for activities like loading, unloading, etc., are not includable in the assessable value; they are liable to pay service tax only on the fixed commission received by them from the principal; all other receipts are expenses incurred and reimbursed on actual basis and hence not includable in the assessable value for the purpose of levying service tax. 12.1. We have perused the Work Order dated 1st April, 1999 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reimbursements. If the buyer enters into a contract for supply of raw materials after negotiating prices from the supplier for the raw materials and the raw materials are received by the manufacturer and the manufacturer pays the amounts to the supplier of raw materials and recovers the same from the buyer, it can certainly be considered as reimbursements. It is to be noted that in such a case, the manufacturer has no role about choosing the source of the materials procured or the price at which the materials procured and the manufacturer is not under any legal or contractual obligation to pay the amount to the supplier. However, if the manufacturer procures raw materials from a source of his choice at a price negotiated between him and supplier of the raw materials and uses the material for manufacture of the final products which he sells, the question of his collecting the cost of raw materials as reimbursement does not arise. The concept of reimbursement will arise only when the person actually paying was under no obligation to pay the amount and he pays the amount on behalf of the buyer of the goods and recovers the said amount from the buyer of the goods. 6.2 Similar is the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediately after the liability was brought to their notice, they took registration and paid Service Tax of Rs.1,17,862/- and also filed their returns for the period from September 1999 to March 2004.It is submitted by the appellant that the returns thus filed were duly acknowledged by the jurisdictional Range Superintendent on 25.10.2004 and no objection was raised regarding the payment of Service Tax on reimbursable expenses at the time of filing the returns. Accordingly, the appellant contended that the extended period of limitation is not invokable in this case to demand Service Tax. 13.1. We observe that Service Tax on clearing and forwarding agent service was a new levy and there were confusions prevailing at that time regarding the value on which Service Tax was payable. We observe that the appellant have taken registration and paid Service Tax on the commission received by them and accordingly filed returns immediately upon being notified about their liability. The Show Cause Notice has not brought any evidence regarding mens rea on the part of the appellant to evade payment of Service Tax. The allegation of wilful mis-statement and suppression of facts with intent to evade p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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