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TMI Blog2016 (6) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... he turnover achieved by Tiems Telecom (P) Ltd. (a company) having separate Service Tax registration number; and (ii) whether the appellant is entitled to deduction for reimbursement of certain expenses from the principal under the provisions of Section 67 of the Finance Act. 2. The brief facts are that a Ltd. Company-Tiems Telecom (P) Ltd. had entered into a contract for providing services with M/s Aircel Digilink India Ltd. which subsequently became M/s Vodafone Essar Digilink Ltd. after merger with Vodafone. The said company was registered with the Service Tax Department and was carrying on business since 2004-05. The appellant started business w.e.f. 14.02.2008. 3. SCN dated 15/10/10 was issued to the appellant for the extended period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit of Rs. 1,21,825/- out of the total demand and confirmed the balance demand of Rs. 1,06,450/-. Being aggrieved the appellant preferred the appeal before the Id. Commissioner (Appeals), who vide the impugned order dated 10/8/2015, in so far as the issue of nontaxability of receipts in the nature of reimbursement is concerned, rejected the claim observing as follows: - "However, it is the point of the Appellant that the amount of demand is inclusive of the amount of reimbursement of expenses; that the service tax is payable only on the Commission and not on the expenses; that the short paid service tax corresponds to the amount of reimbursement of expenses & FOS. It is, thus, the prime point to be deliberated upon, as to whether or not, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax because these amounts are in the nature of payment of actual expenses', involving no service per se, hence these cannot be covered under service tax provisions. (5.3.2) I agree with the Appellant, in principle, that the service tax is not chargeable on the amounts of 'reimbursement' & 'FOS'. However, as already stated, the terminologies used in the said of 'statement of account' are cryptic which do not come up with clear sense, in which they are used. It is, thus, important to first test out as to whether the amounts, which the Appellant has described as the amounts of 'reimbursement' or 'FOS', are actually so, or not. In order to clarify this point, I have gone through the 'Tele Shop Agreement' betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therewith as Annexure IV of the agreement, A combined reading of point no.- 1(d), 1(e) & 1(f) of such 'Operating Manual', provides for the teleshop owner to ensure that he employs such number of persons, possessing such qualification and experience, as may be felt adequate and desirable by M/s ADIL, on the strength of a regular employment letter, however, the wages of such employees would be the responsibility of the teleshop owner. This makes clear that no salary or wages were to be reimbursed by M/s ADIL to the Appellant; (iv) Point no.-6(a) of the 'Operating Manual' is very categorical in this context as it prescribes that the teleshop owner shall carry out all his obligation at his own cost and expenses, including but no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount', no amount is mentioned in the name of service tax, hence it not understandable as to why the Appellant has given such point which is manifestly contradicted by the referred document itself. In any case, the documents available on record, particularly the Tele Shop Agreement', indicate that no 'reimbursement' was made to the appellant, and whatever amount was received by the appellant, in whatsoever name, was actually the 'Commission', in lieu of their services." 4. Heard the parties and perused the records. So far the first issue is concerned regarding the liability of tax for the turnover achieved by the Pvt. Company Ltd. in the hands of this appellant, I hold that appellant is not liable to tax for such turnover ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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