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TMI Blog2016 (1) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied by steamer agent. In my view, the billings made by the Appellant for expenses incurred by them for supply of mobile phones, and airtime charges, crew medical etc. would fall in this category of other/ additional assistance rendered and the value thereof is not required to be added to value of taxable services and hence no tax liability will arise on such value. In the case of Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT], Hon’ble High Cout has held that if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of Revenue that the same, having the character of the remuneration or commission deserves to be included in the sum amount of remuneration/commission. Appeal filed by the Revenue gets rejected - Decided in favor of assessee. - ST/140/2006 - 41779 / 2015 - Dated:- 2-9-2015 - Shri R. Periasami, Technical Member And Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri Rammohan Rao, JC (AR) For the Respondent : Shri V.S. Manoj, Adv., ORDER Per: P.K. Choudhary The appeal was originally filed along with a COD application. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iterated the grounds of appeal and submitted that the amount collected as reimbursable expenses are more than the actual expenses incurred and has been wrongly accounted as collection of reimbursable expenses to avoid payment of service tax and the adjudicating authority has rightly construed the amount collected is for the serviced provided as a steamer agent. He relied on the LB decision of the Tribunal in the case of Sri Bhagavathy Traders Vs. Commissioner of Central Excise, Cochin -2011 (24) STR 290 (Tri.-LB). 4. The Ld. Counsel Shri V.S. Manoj, Advocate, appearing on behalf of the respondent assessee filed a copy of the trade notice No. 39-CE (Service Tax 39) 97 dated 11.06.1997 of the New Delhi Commissionerate giving clarifications of two services viz., custom house agents and steamer agents, wherein steamer agents have been defined in para 3.1 to 3.5. He relied on the Hon ble High Court of Madras judgment in the case of CST, Chennai Vs. Sangamitra Services Agency - 2014 (33) STR 137 (Mad.). 5. Heard both sides and on perusal of the records we find that the issue is in a narrow compass as to whether the reimbursable expenses received by the steamer agent rendering servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied that in relation to the steamer agent the service charges will constitute the husbandry fee as well as the agency commission on import/export cargo. Other expenses incurred by the steamer agent on behalf of the shipping line shall not be taken into account. 3.5 It has been represented that the accounting for purposes of service tax should be on per voyage, per vessel basis and further that the registration for service tax purposes should be done only of their sea port offices. It has been decided that only such sea port offices of the steamer agent should be registered for service tax purpose which are raising the bill to the shipping lines. The branch offices in ICDs which are just sales offices and do not raise any bills to the shipping line, need not be registered. This is for the reason that billing is done by the sea port offices and not the branch offices. On going through para -3.4 above, it clearly mentioned that in relation to the steamer agent, the service charges will constitue the husbandry fee and agency commission on import/export cargo. Other expenses incurred by the steamer agent on behalf of the shipping line shall not be taken into account. 6. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants to shipping lines, beyond the scope of their contractual obligations. Obviously, the Appellant is the ship s conduit in the port of call for contracted steamer agency service. There would sometimes also arise requests for assistance for the ship or her officers, on issues not related to ship s husbandry or booking etc. of cargo of the genre billed in this case. The Steamer Agent, by virtue of their ongoing relationship with the shipping line, inevitably extends any such assistance requested for. Items that may be required for the ship or her officers for personal use are thus very often procured from the market and supplied by steamer agent. In my view, the billings made by the Appellant for expenses incurred by them for supply of mobile phones, and airtime charges, crew medical etc. would fall in this category of other/ additional assistance rendered and the value thereof is not required to be added to value of taxable services and hence no tax liability will arise on such value. I find that the lower adjudicating authority has sought to interpret the scope of the term directly or indirectly as follows: It is not only the services rendered directly to the shipping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of remuneration/commission would nevertheless include expenditure incurred by the assessee providing the services; that all incidental charges for running of the business would also form part of the remuneration or Commission (by whatever name called). The phrase by whatever name called must necessarily have some link or reference or nature to the receipt of remuneration or commission. Thus, if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration/commission. 8. As per Rule 6(8) of Service Tax Rules, 1994, the gross amount referred to therein would apply to receipts of such sum, which would bear the character of remuneration or commission, in that, the said sum is brought under the head receipts . 9. As far as the present case is concerned, when the Revenue s case does not rest on a contention that the expenditure incurred has the character to fall under the expression remuneration or commission , we have no hesitation in rejecting the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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