2008 (9) TMI 284 - AT - Service Tax

Whether the assessee a consulting engineer and is required to include in the assessable value that amount in the bills pertaining to reimbursable expenses - assessee submitted that the issue is concluded in their favour in the case of Scott Wilson Kirkpatrick (I) Pvt. Ltd and also in the case or Malabar Management Services (P) Ltd. - Prima facie, we are not in a position to distinguish the judgments. The Service tax is not leviable on reimbursable expenses. Therefore, stay application is allowed

Summary

Issues: Whether the appellant, a consulting engineer, is required to include reimbursable expenses in the assessable value for Service Tax.

Analysis:
1. The appellants were required to pre-deposit a significant amount for Service Tax, Education Cess, interest, and penalties to hear the appeal. The question was whether the appellant, a consulting engineer, should include reimbursable expenses in the assessable value. The appellant cited a previous ruling where it was held that reimbursable expenses were not subject to Service Tax. The Commissioner (A) attempted to distinguish the ruling, but similar views were expressed in other cases by different benches.

2. The learned Chartered Accountant argued that the issue was settled by previous rulings, and the reasons given by the Commissioner (A) to distinguish them were not legally valid.

3. On the other hand, the learned SDR contended that the appellant was not entitled to claim the benefit of reimbursable expenses.

4. After considering the submissions, the Tribunal found that they were unable to distinguish the previous judgments. It was established that Service Tax was not applicable to reimbursable expenses. Consequently, the stay application was allowed, waiving the pre-deposit requirement and halting the recovery process. The Tribunal decided that there would be no recovery even after 180 days. As the issue was deemed to be in favor of the appellant, the appeal was scheduled for an expedited hearing on 29th October 2008.