2018 (7) TMI 178 - AT - Service Tax

Valuation - non-inclusion of income received from handling charges in assessable value - main contention put forward by the appellant is that the amount alleged to be received by the appellant as handling charges in the show cause notice is nothing but reimbursable expenses - Held that - The appellant has not adduced sufficient evidence to establish this plea - The ld. counsel has pleaded a further chance to establish the same. Taking note of the request made by the appellant, we are of the considered opinion that a further chance can be granted to the appellant to establish his case - Appeal allowed by way of remand.

Summary

Issues:
1. Inclusion of income received from handling charges in the value of taxable services for service tax liability.
2. Whether reimbursable expenses are to be included in the total taxable value.

Analysis:
Issue 1: The appellants were issued a show cause notice alleging non-inclusion of income received from handling charges in their taxable services for service tax liability. The appellant argued that these amounts were reimbursable expenses and should not be included in the taxable value. However, the original authority confirmed the demand, interest, and penalties. The Commissioner (Appeals) upheld the decision, leading to the appellant filing an appeal.

Issue 2: The appellant contended that the handling charges mentioned in the show cause notice were actually reimbursable expenses. The appellant, represented by counsel, cited a Supreme Court decision to support their argument but acknowledged the lack of evidence to prove that the income was indeed reimbursable expenses. The appellant requested a further chance to establish this claim. The respondent reiterated the findings of the impugned order.

The Tribunal, after hearing both sides, noted that the appellant had not provided sufficient evidence to support their claim of handling charges being reimbursable expenses. Acknowledging the appellant's request for another opportunity to establish their case, the Tribunal decided to remand the matter to the adjudicating authority for fresh consideration. The adjudicating authority was instructed to grant the appellant a hearing and review any evidence presented. The impugned order was set aside, and the appeal was allowed by way of remand, keeping all issues open for further examination.