2008 (5) TMI 81 - AT - Service Tax

Commissioner confirming Service Tax with respect of receivables on reimbursements of discounts passed on to their customers by the appellants who is a Clearing and Forwarding Agent - held that reimbursements received by the assessee are not required to be added in the value of the taxable services - impugned order is set aside and the appeal is allowed

Summary

Issues: Service Tax on reimbursements of discounts passed on to customers by a Clearing and Forwarding Agent.

Analysis:
The appeal in question arose from an Order-in-Revision passed by the Commissioner confirming Service Tax on receivables related to discounts passed on to customers by the appellant, a Clearing and Forwarding Agent. The Commissioner held that the remuneration received for providing taxable services should be added to the value of the taxable services. However, the appellants argued that previous Tribunal rulings supported their case, citing judgments in the cases of Nandini Warehousing Corpn., K D. Associates, and S. Jayashree. The appellants contended that reimbursements should not be included in the taxable value based on these precedents.

The learned JDR submitted that the judgments cited by the appellants were distinguishable, supporting the Commissioner's decision to include reimbursements in the taxable value. Upon careful consideration, the Tribunal noted that the issue had been settled in previous judgments, where it was held that reimbursements received by the assessee should not be added to the value of taxable services. Therefore, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.

In conclusion, the Tribunal's decision was based on the established legal principle that reimbursements received by a Clearing and Forwarding Agent should not be considered part of the taxable value for Service Tax purposes. The Tribunal's ruling aligned with the precedents cited by the appellants, leading to the setting aside of the Commissioner's order and the allowance of the appeal with consequential relief for the appellant.