2015 (12) TMI 1107 - AT - Service Tax

Demand of service tax - Business Auxiliary Service - Valuation - Inclusion of reimbursement towards shortage fuel stock diesel consumed in generator, electricity bills, telephone bills and bank charges - Held that - Service of sale of goods produced or provided by or belonging to the client is clearly covered under limb (i) of the definition of Business Auxiliary Service. The contention of the appellant is that it should be treated as rendering man power recruitment or supply agency service. However, the reimbursement was made for the entire gamut of services rendered by the appellant and the labour required therefor has been taken into account only for the purpose of arriving at the quantum of payment for the services rendered. The labour employed remained employees of the appellant who had total control and supervision over them. M/s.HPCL had no supervision or control over the manpower employed by the appellant. Thus it is evident that the appellant did not provide any man power to M/s.HPCL and engaged the labour to render service to HPCL. Thus the appellant was not a supplier of man power to the service recipient and therefore the contention of the appellant in this regard is found to be untenable Reimbursement towards shortage fuel stock diesel consumed in generator, electricity bills, telephone bills and bank charges on a close scrutiny may not be includible in the assessable value. However, as has been conceded by the learned Advocate, it does not have any evidence as to what was the actual amount of such reimbursements and therefore as the appellant is not in a position to claim such deduction for want of evidence to establish the exact amount of such reimbursements, we are unable to give benefit in this regard. - there is no such infirmity in the impugned order as to warrant appellate intervention - Decided against assessee.

Summary

Issues:
Appeal against Order-in-Appeal sustaining service tax demand under Business Auxiliary Service for a specific period.

Analysis:
The appellant was engaged by HPCL to run a company-owned outlet, with duties including physical delivery of petroleum products, security, accounting, stock handling, customer facilities, and more. The lower authority confirmed service tax demand under Business Auxiliary Service based on the agreement terms. The appellant argued that the services provided were akin to man power recruitment and supply agency service, not falling under BAS. Additionally, the appellant contended that certain reimbursements should not be included in the taxable service value. The Revenue contended that the contract clearly fell under Business Auxiliary Service as per the agreement terms, and no evidence was provided by the appellant regarding the reimbursements.

Upon review, it was found that the appellant's services aligned with the definition of Business Auxiliary Service under the Finance Act, 1994. The appellant's argument of providing man power was deemed untenable as the appellant engaged labor for services to HPCL without providing manpower to HPCL directly. The appellant maintained control over the labor employed. The Tribunal noted that while the reimbursement towards certain expenses may not be includible in the assessable value, the lack of evidence regarding the exact amount precluded granting a deduction. The Tribunal cited precedents but emphasized the lack of evidentiary support in this case.

Ultimately, the Tribunal found no infirmity in the lower order to warrant appellate intervention, leading to the dismissal of the appeal. The Tribunal appreciated the efforts of the Advocate who argued the case as amicus curiae.

This detailed analysis of the judgment highlights the contractual terms, arguments presented by both parties, legal definitions, and the Tribunal's reasoning for dismissing the appeal.