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TMI Blog2015 (7) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax wrongly under the category of 'Business Auxiliary Service'. Postage and other stationary expenditure, have been reimbursed on actual basis - service tax cannot be levied on an amount charged as tax since the same is not a consideration for rendering any service. Postage is an amount received by the postal department for transmission by post and cannot be considered as a consideration received by the person who is the sender of the postal article. Further, when the postage is recovered from the service receiver on actual basis by a service provider, he acts as a pure-agent and, therefore, the reimbursements made to a pure-agent is not includible in the value of taxable service rendered, as what is provided under Section 67 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Chartered Accountant appearing for the appellant submits that the appellant is a Share Transfer Agent ('STA' in short) and Registrar to an Issue ('RTI' in short). As a RTI, it acts an agent of a company in processing application for shares, dispatching allotment letters, refund orders, certificates and other related documents in respect of the issue. As an STA, it acts as an agent of the company to process share transfers and dispatch the transfer certificates to the transferees within the mandatory time period. In respect of these services, the appellant is liable to service tax w.e.f. 01/05/2006 under the category of RTI/STA services. For the services rendered, the appellant collects fees, reimbursement of postage paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STR 161). 2.2 As regards the period 01/05/2006 to 31/05/2006, it mainly comprises demand on postage which is not payable, since the relationship between the appellant and its client is that of an agent and principal and postage amounts to 'duty chargeable for the transmission by post of postal articles' in terms of Section 2(f) of The Indian Post Office Act, 1898. 2.3 As regards the demand for the period 01/05/2006 to 31/05/2007 so far it relates to service tax on other expenses incurred, the appellant has already paid service of ₹ 5,94,448/- for the period 01/04/2006 to 31/05/2007 and hence, the demand not sustainable. 2.4 The learned Chartered Accountant also relies on the decision of the hon'ble High Court or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority and submits that in terms of Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, expenses or costs which are incurred by the service provider in the course of providing the taxable services, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax on the said service. He further submits that the decision of the Hon'ble High Court of Delhi in the case of Intercontinental Consultants Technocrats Pvt. Ltd. case (supra) has been challenged before the hon'ble apex Court and has been admitted and, therefore, the said decision is in jeopardy. Therefore, he pleads for upholding the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the postage is recovered from the service receiver on actual basis by a service provider, he acts as a pure-agent and, therefore, the reimbursements made to a pure-agent is not includible in the value of taxable service rendered, as what is provided under Section 67 of the Finance Act, 1994 is only the consideration received for the value of services rendered. Same is the position with respect to the cost incurred towards stationary articles used for sending various items by post. Therefore, these reimbursements on actual basis cannot form the value of taxable service at all. Therefore, the service tax demand by including cost of such expenditure in the value of taxable service is clearly unsustainable in law. Further, Rule 5(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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