2018 (4) TMI 1333 - AT - Service Tax

Valuation - inclusion of reimbursement of amount received from service recipient - crew accommodation, hotel expenses, local travel by crew, handling cost etc. - Held that - reliance placed in the case of INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. Versus UOI. & ANR. 2012 (12) TMI 150 - DELHI HIGH COURT , where it was held that Rule 5 (1) which provides for inclusion of the expenditure or costs incurred by the service provider in the course of providing the taxable service in the value for the purpose of charging service tax is ultra vires Section 66 and 67 - such amount need not be included in assessable value - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against Order-in-Appeal No. 224/2014 dated 30.4.2014 - Taxability of services provided by appellant - Reimbursement of expenses - Classification of services - Applicability of Service tax - Interpretation of relevant legal precedents.

Analysis:

1. The appellant, engaged in providing services of chartered aircrafts, received reimbursements for crew accommodation, hotel expenses, local crew travel, and handling costs from service recipients. The Department classified these services under 'Transport of Passengers by Air on International Journey' and 'supply of tangible goods,' demanding Service tax. However, the Commissioner (Appeals) allowed the appellant's claim based on the precedent set by the Hon'ble High Court of Delhi in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2013 (29) STR 9 (Del)].

2. During the arguments, both parties acknowledged that the decision in the aforementioned case was upheld by the Hon'ble Supreme Court in Union of India vs. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357- SC]. Given the Supreme Court's validation of the precedent, the Tribunal found no grounds to interfere with the Commissioner (Appeals)'s order and consequently upheld the same.

3. The Tribunal, after considering the legal precedents and the arguments presented, dismissed the appeal filed by the Department. The decision was made based on the consistency of the lower court's ruling with the established legal principles as confirmed by the Supreme Court. The judgment was pronounced in open court, finalizing the matter in favor of the appellant.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the legal interpretations made, and the final decision rendered by the Appellate Tribunal CESTAT NEW DELHI.