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2023 (9) TMI 67 - AT - Service TaxValuation - GTA services - inclusion of reimbursable expenditure or cost in the assessable value or not - N/N. 32/2004-ST dated 03.12.04 - HELD THAT - The issue is well covered by the Apex Court judgment in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT . The Notice sought to charge tax on whole value including those received as reimbursement of expenses from their client - reliance placed on the decision in the case of M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. wherein it was held by Hon ble Supreme Court that reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax only w.e.f. 14th May 2015. The adjudicating authority has rightly dropped the demands. The department has not brought in any evidence to the contrary. Accordingly, the department appeal is liable to be rejected - Appeal of Revenue dismissed.
Issues:
The issues involved in the judgment include the demand for Service Tax and Education Cess on various taxable services provided by the Appellant, the validity of documents submitted by the Respondent for availing benefits under Notification No. 32/2004-ST, rejection of certain demands by the Adjudicating Authority, and the confirmation of certain demands. Demand of Rs. 78,51,593/- (Service Tax) and Rs. 8,019/- (Education Cess): The Appellant, acting as a Clearing & Forwarding Agent, raised charges for various services. The Adjudicating Authority found that only commission/service charges constitute taxable value for Service Tax liability, not other charges. The department failed to provide evidence to show which part of the amount was not included in the taxable value. The Tribunal agreed with the findings and held the objection raised by the department as unsustainable. Demand of Rs. 1,52,25,526/- (Service Tax) and Rs. 1725,231/ (Education Cess): The demand was based on a consolidated rate applied for cement sold from different locations. The Respondent explained that certain components of the consolidated rate were not taxable as CFA services. The Tribunal agreed with the Adjudicating Authority's findings that the demand based on the consolidated rate was baseless and void of merit. Demand of Service Tax of Rs. 39.43,758/- and Education Cess of Rs. 35,290/-: The demand was made on the basis of the quantity of cement dispatched and rate agreements. The Respondent contended that the demand was not sustainable as it was made on similar grounds as a previous demand. The Tribunal agreed with the findings of the Adjudicating Authority and held the demand as not sustainable. Demand of Service Tax of Rs. 59,425/-: The demand was proposed on the 'Profit of Sale', which the Respondent challenged as being based on assumption and presumption. The Tribunal observed a lack of documentary evidence from the Department to support the charge, leading to the amount not being confirmed. Demand of Service Tax of Rs. 3,66,497/- and Education Cess of Rs. 7,330/-: The Respondent claimed abatement on GTA services under a specific Notification, which the Department alleged was not supported by valid declarations. The Tribunal found that the declarations submitted by the Respondent were valid documents, making the demand unsustainable. Demand of Service Tax of Rs. 25,748/- and Education Cess of Rs. 515/-: The demand related to non-payment of Service Tax on specific services during a particular period. Due to the lack of documentary evidence regarding tax payment or required declarations, the amount was confirmed. Demand of Service Tax of Rs. 1,764/- and Education Cess of Rs. 35/-: The demand was for short payment during a specific period. With no contest from the Respondent, the amounts were confirmed. Cenvat credit demands: The demands related to alleged excess credit and non-related output service. The Tribunal found that the Department did not provide sufficient details or evidence in the Show Cause Notice to support the demands, leading to the amounts being dropped. Interest demand: The Respondent was also liable to pay interest for delayed payment of Service Tax, as alleged in the Show Cause Notice. Conclusion: The Tribunal upheld the findings of the Adjudicating Authority in dropping most of the demands due to lack of evidence provided by the Department. The Department's appeal was rejected as they failed to present any contrary evidence. The Tribunal emphasized the importance of documentary evidence in supporting tax demands and confirmed the dropping of demands based on the valuation law as per relevant legal precedent.
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