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2021 (11) TMI 835 - AT - Service TaxValuation - security agency services - inclusion of reimbursable expenses in the value of the taxable services - HELD THAT - The issue is squarely covered in favour of the appellant by various decisions referred to by the appellant. Taking note of all the said decisions, the Tribunal in the case of M/S BHARAT COKING COAL LTD. VERSUS COMMR. OF CENTRAL EXCISE S. TAX, DHANBAD 2021 (9) TMI 23 - CESTAT KOLKATA where it was held that Allahabad Bench of the Tribunal in the case of CENTRAL INDUSTRIAL SECURITY FORCE VERSUS COMMISSIONER OF CUSTOMS, C.E. S.T., ALLAHABAD 2019 (1) TMI 1661 - CESTAT ALLAHABAD , has already settled the issue in favour of the appellant to hold that expenses incurred towards medical Services, vehicles, expenditure on Dog Squad, stationery expenses, telephone charges, expenditure incurred by the service recipient for accommodation provided to CISF etc are not includible. Appeal allowed - decided in favor of appellant.
Issues:
1. Inclusion of reimbursable expenses in the value of taxable services provided. 2. Service tax liability on the value of services rendered. 3. Interest and penalties imposition under relevant sections of the Act. Analysis: Issue 1: Inclusion of reimbursable expenses in the value of taxable services provided The appellant, a security agency service provider, was under scrutiny for not including the value of certain facilities like accommodation, medical facility, vehicle, telephone, stationery, etc., while determining the taxable value for service tax payment. The Additional Commissioner held that the additional consideration received by the appellant should be included in the gross value of taxable services rendered, as per Section 67(1)(ii) of the Finance Act, 1994. However, the Tribunal referred to various decisions, including one by the Allahabad Bench and the Principal Bench at New Delhi, which established that expenses like medical services, vehicles, accommodation, etc., need not be added to the assessable value for service tax payment. The Tribunal found that the legal position had already been decided by the Supreme Court and set aside the impugned order, allowing the appeal with consequential relief. Issue 2: Service tax liability on the value of services rendered The appellant was providing security agency services to a company and was issued a show cause notice demanding service tax, interest, and penalties for not including certain expenses in the taxable value. The Additional Commissioner confirmed the demand for service tax, interest, and imposed a penalty under relevant sections of the Act. However, the Tribunal, based on previous decisions and legal positions established by higher courts, found in favor of the appellant and set aside the impugned order, allowing the appeal with consequential relief. Issue 3: Interest and penalties imposition under relevant sections of the Act The Additional Commissioner had imposed interest and penalties on the appellant for non-payment of service tax as per the show cause notice. However, the Tribunal, considering the legal precedents and decisions, found that the demand for interest and penalties was not sustainable. The Tribunal set aside the impugned order and allowed the appeal with consequential relief. In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief based on established legal positions and decisions regarding the inclusion of reimbursable expenses in the taxable value of services provided and the imposition of service tax, interest, and penalties.
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