2015 (3) TMI 873

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..... travel expenses while providing output service and the said travel expenses were recovered from the service-recipient but the appellant had failed to pay service tax on the said expenses recovered from the service-recipient as contemplated in terms of the explanation to Section 67 of the FINANCE  Act, 1994. Hence a show cause notice dated 17/07/2008 was issued to appellant alleging contravention of the provisions of Section 68(1) read with Section 66 of the FINANCE  Act and hence the recovery of service tax amounting to Rs. 1,11,103/- was demanded along with interest in terms of Section 73(1) and 75 of the FINANCE  Act, 1994 respectively. Further, Sections 76, 77 and 78 were invoked for imposition of the penalty. Aggrieved b .....

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..... it that provisions of Section 67 of the FINANCE  Act, 1994 would indicate that the gross amount which is charged for rendering the services should be the value on which the appellant needs to discharge service tax liability and in case the appellant has collected any amount over and above the service charges which were billed by them, that amount being the amount for rendering services should have been considered for discharge of service tax liability. 5. Heard both the sides. 6. The issue involved in this case is regarding inclusion of an amount which has been received by the appellant as reimbursements of travelling expenses for discharge of service tax liability under the category of 'erection, commissioning and installation servi .....

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..... the Board vide its Service Tax instructions F.No. B..43/5/97-TRU, dated 2.7.97 held in para 3.5 that the expenses incurred on account of reimbursable expenses shall not form part of the value of the taxable services. To the same effect is another instruction being Service Tax F.No. B11/98-TRU, dated 7.10.98." The above order is upheld by the hon'ble apex Court by dismissing the civil appeal filed by the Revenue, is directly applicable in the case on hand. 7. In view of the foregoing and the judicial pronouncements, we find that the impugned order is unsustainable in law and is liable to be set aside and we do so. The impugned order is set aside and the appeal is allowed with consequential relief, if any. (Dictated in court )
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