2024 (2) TMI 1305 - AT - Service Tax

Recovery of Service tax with interest and penalty - non-inclusion of certain expenses like inspection charges, property evaluation fees, postage charges etc. in the transaction value - period April 2010 to March 2016 - HELD THAT - In the Review Order, only the statutory principle of law has been reiterated and no evidence has been adduced to negate the specific findings of the adjudicating authority holding that the service tax on all these expenses, by including the same in the gross transaction value has been discharged by the respondent. In the result, the impugned order is upheld and the Revenue s appeal being devoid of merit, accordingly dismissed.

Summary

Issues involved: Appeal against Order-in-Original regarding inclusion of expenses in gross transaction value for service tax calculation.

Issue 1: Inclusion of expenses in gross transaction value

The appeal was filed by the Revenue against the Order-in-Original passed by the Commissioner of Central Excise and Service Tax, Kozhikode, alleging that certain expenses incurred by the NBFC in providing gold loans were not included in the gross transaction value for service tax calculation. The Revenue argued that expenses like postage, telegram, and telephone charges should have been considered in the gross taxable value as per Section 67(1) of the Finance Act, 1994. On the other hand, the respondent contended that all expenses incurred in rendering taxable services were already included in the gross transaction value and had already suffered service tax. The learned Commissioner observed that the expenses reflected in the expenditure account of the assesse were not separately recovered from customers and therefore should not be subject to service tax levy. The Commissioner found no evidence of recovery of expenses from customers in the ledger accounts submitted by the assesse. The Commissioner concluded that the demand for service tax on these expenses lacked evidence and was dismissed. The Review Order upheld the impugned order, stating that the service tax on the expenses had been discharged by including them in the gross transaction value, and the Revenue's appeal was dismissed for lacking merit.

In conclusion, the Tribunal upheld the Order-in-Original, ruling that the expenses incurred by the assesse in providing gold loans were already included in the gross transaction value and had been subject to service tax, therefore dismissing the Revenue's appeal.