2008 (10) TMI 132 - AT - Service Tax

C/F Agent assessee s contention that the amount received by them as expenses incurred towards loading and unloading charged paid to head load workers pool under the Kerala Head Load Workers Act, is only reimbursement and this was not proved by them with evidence before the Original Authority - matter is remanded to Original Authority to give an opportunity to the appellants to produce evidence to show that the expenses incurred towards head load workers pool was reimbursed to them

Summary

Issues:
Challenge to Order-in-Appeal No. 49/2007-ST confirming Order-in-Original No. 74/2005-06 regarding Service Tax liability on reimbursable expenses.

Analysis:
The appellant contested the correctness of the Order-in-Appeal, arguing against the Service Tax liability on reimbursable expenses. They acknowledged a specific amount payable but disputed other reimbursable expenses. Citing precedents like Scott Wilson Kirkpatrick (I) (P.) Ltd. v. CST, Alathur Agencies v. CCE&C, Jaylaxmi Enterprises v. CCE, Malabar Management Services (P.) Ltd. v. CST, and Apco Agencies v. CC&CE, the appellant claimed that reimbursable amounts from clients should not factor into assessable value for Service Tax.

The Tribunal noted the appellant's assertion that expenses towards loading and unloading charges paid to head load workers pool under the Kerala Head Load Workers Act were merely reimbursements, not taxable income. However, the department contended that these charges were not reimbursable and lacked evidence supporting the appellant's claim before the Original Authority.

After considering the arguments, the Tribunal found insufficient evidence from the appellant to prove the nature of expenses related to the head load workers pool. Despite the appellant's confidence in establishing the reimbursements based on legal precedents, the Tribunal decided to remand the matter to the Original Authority. The Original Authority was directed to allow the appellants to present evidence within four months to demonstrate that the expenses were indeed reimbursed. The Original Authority was instructed to re-adjudicate the issue based on the provided evidence and the cited legal judgments, potentially granting relief if the reimbursements were validated.