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TMI Blog2019 (11) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of such godowns. Electricity, electrical maintenance sweeping etc. of the godowns are directly relatable to the maintenance of such premises which belong to M/s HLL. Instead of M/s HLL undertaking these activities, the appellant is doing these jobs and claiming reimbursement from M/s HLL. In our considered view, these cannot form part of the taxable services rendered by the appellant in this factual matrix - demand do not sustain. Restacking, reconditioning expenses - HELD THAT:- These pertain to arrangement and rearrangement of the goods in the depot which lie at the heart of the C F Agent s activity and do not pertain to maintenance of the premises belonging to M/s HLL although this amount is paid separately to HLL - this forms part of the assessable value for the CFA services. EDP expenses - HELD THAT:- The computer stationery, cartridges and computer maintenance are used in the godown as is evident from the agreement for the given activities of the appellant as C F Agent such as generation of invoices - these charges are essentially input expenses towards rendering of the C F agent services. Therefore the same are includible in the assessable value. Bank charges and CASM ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. Hence both appeals are being disposed of together. The assessee appellant, M/s Ram Mohan Rao are clearing and forwarding agents for M/s Hindustan Lever Ltd (HLL) and are discharging service tax. Revenue has received intelligence that the appellant was not paying service tax on the entire consideration for the service received by them and accordingly summoned officials of the assessee as well as of M/s HLL, recorded statements, obtained information and arrived at a conclusion that they have not discharged full service tax. Accordingly show-cause notice dated 09.02.2007 covering the period 2001-02 to 2005-06 and show-cause notice dated 22.10.2007 covering the period April 2006 to March 2007 were issued. 2. Both the show-cause notices were adjudicated by the Commissioner by order-in-original No. 4/2008 dated 29.05.2008. On appeal by the assessee, Tribunal vide Final Order No. 314/2009 dated 25/03/2009 remanded the matter for denovo adjudication. The denovo adjudication order-in-original No. 26/2009 dated 27.11.2009 issued by the Commissioner confirmed the demands raised in the aforesaid show-cause notices along with interest and imposed penalties. Aggrieved by this order, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Intercontinental Consultants and Technocrats Pvt Ltd [2018(10)GSTL 401 (SC)], no service tax can be levied on reimbursable expenses because they are not related to service provided and cannot form part of the gross amount received for such service. The demand on the amounts received under this head needs to fail for this reason alone. Similarly, with respect to restacking or reconditioning expenses (Sl No.5 of the table) it is their submission that these pertain to arrangement/rearrangement of the stock in the depot which is not part of their CFA activity and therefore the amounts paid under this head cannot be included in the taxable amount for CFA services. With regard to EDP expenses (Sl No. 6 of the table) it is their contention that the computer stationery, cartridges, maintenance of computers are all in the godown and the expenses incurred with respect to these by them are reimbursed by the principal M/s HLL cannot form part of the value of taxable service. Their contention with respect to the bank charges (Sl No. 7 of the table) is that they pertain to DD charges and messenger charges etc. and the temporary salesmen expenses (CAS expenses) (Sl No. 8 of the table) canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooked for delivery at the godown or to the nearest railway, shipyard, ferry airport or lorry service. Expenses incurred by the C&F Agents towards freight inwards from such place of clearance, other than cases of delivery at the godown, shall be borne by the Company at actuals. 7) The goods received by the C&F Agents from the Company shall be stored by them in a godown or godowns separately and shall not be mixed with any other stocks. The godown shall display sign-board indicating that the goods belong to and are the property of the Company. 9) The C&F Agent shall be responsible for the safety of the goods entrusted by the Company from the time of receipt of the goods till such goods are issued out of the godown as per instructions of the Company. The C&F Agent shall be liable to make good any loss caused to the Company as a result of pilferage, theft, robbery or damage or destruction of the goods excluding acts of God. 10) While receiving the goods for stocking, the C&F Agent shall verify that the goods are in good condition. If for any reason damage or injury to the goods is noticed the C&F Agent should promptly record itsassessment of the damage and obtain the signatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring these expenses, it is impossible for the assessee to perform their functions as a CFA. Simply because these expenses are paid separately by M/s HLL they do not become reimbursable expenses but are part of the consideration for the services rendered by the appellant. Similarly restacking or reconditioning of the goods at the depot is an essential part of the functions of the CFA. Although the godown belongs to M/s HLL the goods therein are stacked, restacked, operated, dispatched by the appellant assessee. This being part of core of their CFA operations, amounts received under this head cannot be excluded from the assessable value for CFA services. Regarding the EDP expenses he would urge that computer stationery, cartridges, maintenance of computers are necessary for the assessee to perform one of their vital functions under the CFA agreement namely generation of invoices. For this purpose they incurred expenses which are paid by HLL to them. It is inconceivable that the CFA services can be rendered without incurring these essential services. He would also urge that bank charges CASM expenses are also similarly incurred by the assessee as part of their CFA activities. 6. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at appellant is registered under the service tax but has failed to reflect the total value of taxable services rendered. The under-valuation of the taxable services was noticed only after detailed verification of records of the asessee. Show-cause notice is based on balance-sheets of the assessee and other books of accounts which were not available to the department in the normal course. The assessee being involved in a huge business activity cannot plead ignorance of law. If at all they had any doubt, they could have sought clarifications. All this shows that appellant had an intention to evade payment of service tax. They cannot wait for the department to come and knock at his door to discharge the service tax. Therefore he would pray that Revenue's appeal may be upheld and the assessee's appeal may be set aside. 9. We have considered the arguments of both sides and perused the records. The short point to be decided is whether the appellant is liable to pay service tax on various amounts enumerated at Sl No 3 to 11 in the table above on which they had not discharged service tax. It also needs to be determined whether extended period of limitation can be invoked and whether penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o M/s HLL although this amount is paid separately to HLL. In our considered view this forms part of the assessable value for the CFA services. (4) EDP expenses:- The computer stationery, cartridges and computer maintenance are used in the godown as is evident from the agreement for the given activities of the appellant as C&F Agent such as generation of invoices. Hence, in our considered view these charges are essentially input expenses towards rendering of the C&F agent services. Therefore the same are includible in the assessable value. (5) Bank charges and CASM expenses: It is not clear as to what these charges specifically pertain to from the records. Therefore, we do not find sufficient evidence on record to say that these are input services for rendering of C&F agent services by the appellant. (6) Primary freight secondary freight and service charges:- We find from the C&F Agent agreement that it does not include transportation of the goods as part of the service to be rendered. It is the case of assessee that they have a separate agreement with M/s HLL for transportation of goods which is not part of the CFA agreement. This can only be considered as Goods Transport Age ..... X X X X Extracts X X X X X X X X Extracts X X X X
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