9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (5) TMI 668 - AT - Service TaxValuation of service - Clearing Forwarding Agency Service - inclusion of reimbursed freight charges in the taxable value of services for discharging service tax - Extended period of limitation - HELD THAT - It is seen from the definition of Clearing Forwarding Agent that such Agent would require to undertake transportation of goods also. Undisputably, The amounts which are subject to levy of service of tax in the present case are reimbursements received by the appellant from M/s.ACCL The Department has been carried away by the freight charges received by appellant on consignment notes issued by appellant for transportation under Goods Transport Agency Agreement. The service tax on the freight charges received by the appellant from M/s.ACCL after issuing consignment notes has already been discharged by M/s.ACCL as the service recipient - it is very clear from the SCN that the demand has been made only in regard to reimbursable expenses received from M/s.ACCL as part of C F activity and not for the freight charges received with regard to GTA Agreement. The issue as to whether the reimbursable expenses is to be included in the taxable value for the period prior to 2015 is settled by the decision of Hon ble Delhi High Court in the case of INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. VERSUS UOI. ANR. 2012 (12) TMI 150 - DELHI HIGH COURT as affirmed by the Hon ble Supreme Court in 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.' Extended period of limitation - HELD THAT - The demand has been raised on freight reimbursable expenses accounted by the appellant as per figures indicated in the books of accounts. The Department has not established any positive act of suppression on the part of the appellant. The issue as to whether the reimbursable expenses has to be included in the taxable value was under litigation and also put into a situation of bringing forth amendment under Section 67 of the Finance Act, 1994. Taking all these aspects into consideration, the issue is interpretational in nature and therefore the invocation of extended period cannot sustain. The issue on limitation is also answered in favour of the appellant. The impugned order is set aside - Appeal allowed.
Issues involved: Whether reimbursed expenses received by the appellant from M/s.ACCL are liable to be included in the taxable value for payment of service tax.
Summary: Issue 1: Reimbursed expenses in taxable value The appellant, engaged in Clearing and Forwarding Agency Service and Transportation of Goods by Road Services, was noted to have entered into agreements with M/s.ACCL for reimbursement of freight charges incurred in transportation of goods. The Department alleged that the Goods Transportation Agreement was a camouflage for evading service tax on freight charges. The appellant argued that the reimbursable expenses were not to be included in the taxable value, citing legal precedents. The Tribunal found that the demand on reimbursable expenses could not be sustained, as per the Delhi High Court decision upheld by the Supreme Court. Issue 2: Interpretation of agreements The appellant contended that the agreements with M/s.ACCL were for C&F Agency Service and transportation of goods, with reimbursement of expenses like freight charges. The Department argued that the freight charges reimbursed by M/s.ACCL should be included in the taxable value. The Tribunal noted that the demand was only for reimbursable expenses related to C&F activity, not for freight charges under the Goods Transport Agency Agreement. Citing legal precedents, the Tribunal held that the demand on reimbursable expenses was not justified. Issue 3: Limitation on demand The appellant raised the issue of limitation, stating that the demand was based on accounted figures and there was no suppression of facts. The Tribunal agreed that the issue of including reimbursable expenses in the taxable value was interpretational and that the invocation of the extended period for demand could not sustain. Therefore, the Tribunal set aside the impugned order and allowed the appeal with consequential relief. (Order dictated and pronounced in the open court)
|
