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TMI Blog2018 (7) TMI 1531X X X X Extracts X X X X X X X X Extracts X X X X ..... e classified by the department in the first place to show how these amount to services rendered by the service provider abroad and received in India and how they are liable to charge to service tax under reverse charge mechanism. In the present case, where the appellant is supposed to have received the services and is liable to pay service tax under reverse charge mechanism, it is essential that the department say what services were received by the appellant and how they were unclassifiable and how they were liable to be charged under reverse charge mechanism and compute their tax liability accordingly. This is an original work to be done with respect to each of the specific items of expenditure on which service tax is proposed to be charged. It is appropriate to remit the matter back to the original adjudicating authority with a specific direction to compute the demand after specifying how each of the items of the expenditure are chargeable to service tax - appeal allowed by way of remand. - Appeal No. ST/31175-31177/2016 - A/30677-30679/2018 - Dated:- 4-6-2018 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Y. Srinivasa Reddy, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x liability confirmed is substantial. Accordingly, the matter was listed for hearing today. 3. Heard both sides and perused the records. 4. The appellants have submitted a list of 91 expenses incurred by them on various items on which the service tax is proposed to be charged. (a) Sl.No. 1 to 6: These pertain to the expenditure under the head Commission which is classifiable as Business Auxiliary Service. Service Tax was demanded in respect of these items on the ground that there was a difference between what was declared in their ST-3 Returns and what is accounted for in their Ledger and since these payments were made to the Commission Agents, service tax was demanded on the same. The appellant s argument is that the differential amount is only the amount for which a provision is made and this is not the actual amount paid as commission. Therefore, according to them, no service tax is payable on the differential amount. (b) Sl.No. 7 to 12 : These amounts are booked under Patent Product Registration charges in their Ledger. The department seeks to classify these as IPR services and charge service tax on the difference between the amounts of their ST-3 returns and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l.No. 35 to 45: These expenses pertain to Clinical Test Charges, Consultancy Charges, Consumption of innovatory samples and testing charges. The department sought to classify the clinical test charges as technical testing and analysis service and Scientific Consultancy Service and had not made any specific classification of the remaining services. Appellant argues that these services were received and consumed outside India and hence no service tax needs to be paid on them. (g) Sl.No. 46 to 91: These are pertain to variety of charges such as Factory Audit Expense, Translation Charges, Audit Expenses, Bank Interest, Factory Maintenance, Repair and Maintenance of computers, Membership and subscription charges, Seminar expenses, stationery charges, vehicle maintenance, travel expenses, Hotel stay expenses etc. which were not classified under any particular head by the department. The appellant argues that these are in nature of office expenditure and no service is involved in such expenditure. 5. Appellant argues that the show cause notice was issued simply based on the amounts in the balance sheet or Ledger account comparing them with the amounts in the ST-3 returns without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... branch offices and associate companies expenses incurred towards salaries, purchase of properties etc. and all these are reimbursed by them. The department s proposal to charge these as business promotion expenses and charge them under reverse charge mechanism is not correct. The appellant relied on the following case laws: (a) Milind Kulkarni and others vs. CCE, Pune [2016-TIOL-709-CESTATMumbai] (b) Genym biotech vs. CCE,Nasik [2016(42)STR 918 (Tri.-Mum.] (c) KPIT Cummins Info System Ltd. CCE Pune [2013-TIOL-1568- CESTAT-Mumbai] (d) CCE Bangalore vs. Pragati Concrete Products Pvt. Ltd [2015(322)ELT 818 (SC)] (e) Sunil Forging Steel Industries vs. CCE, Belapur [20176(332)ELT 341 (Tri.-Mum.)] (f) CCE Bangalore vs. MTR Foods Ltd [2012(282) ELT 196 (Kar.)] (g) Trans Engineers India Pvt. Ltd. vs. CCE, Pune [2015(40)STR 490 (Tri.-Mum.)] 8. Ld. DR reiterated the arguments made in the Orders-in-Original and vehemently opposed the appeal. It is his submission that the appellant was bound to have filed the returns reflecting the actual amount of services and the service tax liability thereon and paid the service tax accordingly. However, the appellant had not done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On going through the Order-in-Original, we find that Ld. Commissioner has not examined as to how each of the items of expenditure discussed above amount to services received by the appellant in India and how they are chargeable to service tax under reverse charge mechanism. We also find that there are various items of expenditure such as salaries, office expenses etc. which need to be classified by the department in the first place to show how these amount to services rendered by the service provider abroad and received in India and how they are liable to charge to service tax under reverse charge mechanism. It has been held in the case of DHL Express India Pvt. Ltd. (supra) that consideration received from a recipient of service for the services rendered by the provider alone is taxable and the demand for alleged short paid tax must be based on a finding that a specific taxable service has been provided as agreed to be provided and on the consideration that was paid or payable by the recipient of the service to the provider of the service. Similarly, in the present case, where the appellant is supposed to have received the services and is liable to pay service tax under reverse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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