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TMI Blog2017 (11) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants are liable to service tax under BAS w.e.f. 16/06/2005 only. Regarding the contention of the appellant that incentives are to be treated separately, we note that the same is not a tenable position. Valuation - reimbursement of expenses on actual basis - Held that: - When the expenditure is incurred on behalf of the client and reimbursed on actual basis the same are to be excluded from the taxable value. Penalties - Held that: - this is a fit case for invoking provision of Section 80 for setting aside the penalty on appellant - penalties set aside. Appeal allowed in part. - Service Tax Appeal No.1722 of 2011 - ST/A/57686/2017-CU[DB] - Dated:- 3-11-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of client was not accepted by the Original Authority who held that the appellant shall pay service tax on the gross value without any deduction. The learned Counsel appearing for the appellant submitted that as per the arrangement with airlines being an IATA approved agent, the appellants book cargo space for transport of cargo by the shippers. They do get commission from the airlines for this activity. They also get additional incentives based on certain threshold limits. He submitted that their tax liability with reference to commission agent who is involved in sale of services will be liable to tax only after explanation inserted in the tax entry w.e.f. 16/06/2005. Prior to that, the commission agents are referred to and restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perused the appeal records. We note that the commission agents are shown in the inclusive part of the definition such agents are not to be treated as only involved in promotion and marketing. Though commission agents do end up promoting or marketing the services the arrangement and manner of payment of consideration decides their scope of activities and brings them under the category of commission agent. In the present case, there is no sale or purchase of goods on behalf of clients. It is the service which the appellant are dealing with. The explanation inserted in the statutory definition w.e.f. 16/06/2005 is to the effect : Explanation For the removal of doubts, it is hereby declared that for the purposes of this clause, - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated separately, we note that the same is not a tenable position. The consideration known as a commission or incentive are of same nature attributable to the said activity of the appellant as a commission agent. The difference is that incentive is based on certain threshold turnover, whereas the commission is of generic nature. Accordingly, we find the incentives are liable to be taxed for the period 16/06/2005 onwards. 8. Regarding the gross value, we are in agreement with the appellant that wherever expenditures are incurred and are reimbursed on actual basis without any mark up or margin, the same are to be excluded from the taxable value. This legal position has been well settled by now. However, this has to be supported by docum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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