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2018 (4) TMI 230 - HC - Service TaxValuation - inclusion of transportation charges - Clearing and Forwarding Agency services - Held that - Pre-disposed mind itself is sufficient to hold that the decision-making process is erred as the author of the order already directed the petitioner to include transportation of goods charges way back in the year 2010 itself - this Court is of the view that the impugned order has to be set aside for reconsideration - petition allowed by way of remand.
Issues:
1. Whether the petitioner is required to include transportation charges for levy of tax. 2. Whether the petitioner can bifurcate segments of different services provided under different heads for the purpose of service tax. 3. Whether the decision-making process of the authority was erroneous and biased. Analysis: 1. The petitioner, a Clearing and Forwarding Agent, derived income from various services provided to a company, including transportation charges. The petitioner contended that the service tax for transportation charges was paid by the company under the reverse charge mechanism. An order was passed by the Assistant Commissioner of Central Excise directing the petitioner to include transportation charges, which the petitioner challenged. The Court examined whether the petitioner was required to include transportation charges for tax levy. 2. The Court also considered whether the petitioner could separate different services provided under various heads for service tax purposes. The petitioner argued that since the company was paying service tax, there was no need for the petitioner to do so on the same service. Additionally, the petitioner claimed that the activities of a Clearing and Forwarding Agent were distinct from the transportation service provided to the company. 3. The Court focused on the decision-making process of the authority and the potential bias of the officer who conducted an audit and issued the order. The Court noted that the same officer who directed the petitioner in a previous audit also passed the impugned order, indicating a lack of independence in the adjudication process. The Court emphasized that quasi-judicial authorities must be free from bias and prejudice. As the officer had already directed the petitioner on the transportation charges in a previous order, the Court held that the decision-making process was flawed. The Court set aside the impugned order for reconsideration, emphasizing the need for an independent decision without influence from past directions. In conclusion, the Court allowed the writ petition, setting aside the impugned order and directing the petitioner to appear before the authority for reconsideration. The Court clarified that it did not assess the matter on merit, leaving the authority to reach an independent conclusion after hearing all objections raised.
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