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2018 (6) TMI 1428 - AT - Service TaxValuation - inclusion of Postal and Telegraph charges collected from assessee - whether or not, the assesses are liable to pay service tax on Postal and Telegraph Charges (P & T charges) recovered from their customers/account holders? - Held that - The claim of the assesses that the amount sought to be included in value is P& T Charges, is not disputed by the Lower Authorities nor is it disputed that such postal charges were recovered from their customer/account holders on actual basis - The claim of the assessee being these amounts are reimbursable expenses, cannot be included in the value of the consideration for rendering of the services has been upheld by the Apex Court in the case of Union of India and ANR. Vs. M/s Intercontinental Consultants and Technocrats Pvt. Ltd., 2018 (3) TMI 357 - Supreme Court of India - appeal dismissed - decided against Revenue.
Issues:
1. Whether the assesses are liable to pay service tax on Postal and Telegraph Charges (P & T charges) recovered from their customers/account holders. Analysis: The Appellate Tribunal CESTAT Hyderabad dealt with two appeals raising a common question of law regarding the liability of assesses to pay service tax on Postal and Telegraph Charges (P & T charges) collected from customers/account holders. The Revenue filed Appeal No. ST/592/2009 against Order-in-Appeal No. 27/2009, while the appellant bank filed Appeal No. ST/756/2009 against Order-in-Appeal No. 33/2009. The Tribunal heard both sides and examined the records to determine the issue at hand. It was established that the assesses contended that the charges in question were reimbursement of actual expenses incurred during business operations, while the Revenue argued that these charges should be included in the gross value of services rendered and taxed. The Tribunal noted that the assesses' claim regarding the nature of the charges was undisputed, and it was affirmed that the charges were recovered on an actual basis from customers/account holders. The Tribunal referred to a relevant decision by the Apex Court in the case of Union of India and ANR. Vs. M/s Intercontinental Consultants and Technocrats Pvt. Ltd., where it was held that reimbursable expenses cannot be included in the consideration for services rendered. Based on this legal precedent and the factual matrix of the case, the Tribunal concluded that the issue was no longer open to debate. Consequently, the Tribunal upheld the impugned order in Appeal No. ST/592/2009, rejecting the appeal filed by the Revenue. Similarly, the Tribunal found the impugned order in Appeal No. ST/756/2009 unsustainable and set it aside, allowing the appeal of the appellant assessee. In summary, Appeal No. ST/756/2009 was allowed, while ST/592/2009 was rejected. In conclusion, the Appellate Tribunal CESTAT Hyderabad, comprising Mr. M.V. Ravindran and Mr. P. Venkata Subba Rao, resolved the issue of service tax liability on Postal and Telegraph Charges in favor of the appellant assessee based on established legal principles and precedents, thereby providing a clear and decisive judgment on the matter.
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