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2020 (10) TMI 534 - AT - Service TaxShort payment of Service Tax - CHA Services - period Oct. 08 to Dec. 08 - non-inclusion of reimbursable expenses in taxable value for paying the service tax for the period Apr. 06 to Mar. 08. Short payment of service tax - HELD THAT - The appellant has paid-up the amount and also filed service tax returns in 2009. Only an amount of ₹ 9,073/- with interest stands to be discharged as calculated by the adjudicating authority. Taking note of this fact that the appellant has discharged the service tax for the said period before show-cause notice, the imposition of penalties in this regard is unwarranted - appellant has to pay the balance amount of ₹ 9,073/- with interest if not paid. Inclusion of reimbursable expenses - Apr. 06 to Mar. 08 - HELD THAT - The demand is made on the expenditure incurred by the appellant as pure agent - The said issue is covered by the decision of the Hon ble Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. - demand do not sustain. Appeal allowed in part.
Issues:
1. Short-payment of service tax for the period Oct.'08 to Dec.'08 2. Inclusion of reimbursable expenses in taxable value for paying service tax for the period Apr.'06 to Mar.'08 Analysis: Issue 1: Short-payment of service tax for the period Oct.'08 to Dec.'08 The appellant, a Customs House Agent (CHA), was issued a show-cause notice alleging short-payment of service tax amounting to ?71,952 for the mentioned period. The original authority confirmed the demand along with interest and imposed a penalty, which was upheld by the Commissioner (Appeals). However, it was argued that the appellant had already paid the tax, with only a balance of ?9,073 remaining, as noted by the adjudicating authority. The Tribunal observed that the appellant had discharged the service tax before the show-cause notice, and thus, the imposition of penalties was deemed unwarranted. Citing section 80 of the Finance Act, 1994, the Tribunal set aside the penalty but directed the appellant to pay the balance amount of ?9,073 with interest if not already paid. Issue 2: Inclusion of reimbursable expenses in taxable value for paying service tax for the period Apr.'06 to Mar.'08 Regarding the demand made in respect of reimbursable expenses, it was argued that the amounts were actual expenses reimbursed by customers. The Tribunal referred to the decision of the Hon'ble Supreme Court in a specific case and concluded that the demand on the expenditure incurred by the appellant as a pure agent could not be sustained. Following the Supreme Court's decision, the Tribunal set aside the demand of ?21,56,503 being service tax on reimbursable expenses. Consequently, the impugned order was modified to set aside the penalty and demand related to both issues, partially allowing the appeal with consequential reliefs, if any. This judgment by the Appellate Tribunal CESTAT CHENNAI, delivered by Hon'ble Smt. Sulekha Beevi C.S and Hon'ble Shri C.J. Mathew, provides a detailed analysis of the issues concerning the short-payment of service tax and inclusion of reimbursable expenses in taxable value, ensuring a fair and just decision based on legal interpretations and precedents.
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