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TMI Blog2019 (3) TMI 1820X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant has rightly contended that these reimbursable expenses is not in the nature of service and, therefore, no Service Tax could have been levied as held in the impugned order. Imposition of penalty on the amount paid by the appellant - Suppression of facts or not - HELD THAT:- There is no scope of levy of any penalty under the provisions of Section 78 of the Act - there was no suppression of fact on part of the appellant and the Department was fully aware of the payment which has been made by them along with the interest. Appeal allowed - decided in favor of appellant. - ST/52330/2016-DB - Final Order No. ST/A/51183/2019-CU(DB) - Dated:- 26-3-2019 - Ms. Archana Wadhwa, Member (J) and Shri Bijay Kumar, Member (T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 60(L) above, subject to verification by Range office. (vi) I impose a penalty of ₹ 1,000/- on the Noticee under Section 77 of the Finance Act, 1994 (as amended). (vii) I impose a penalty of ₹ 5,33,60,522/- on the Noticee under Section 78 of the Finance Act, 1994 (as amended) which shall be further reduced to 25% of the amount if the tax dues are paid within 30 days from the date of communication of this order together with interest payable thereon and reduced penalty. Being aggrieved by the order, the appellant is in appeal before us. 2. The Learned Advocate on behalf of the appellant submits that the impugned order is legally not sustainable on the ground as under :- (i) The impugned order i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate interest on foreign remittances under reverse charge mechanism for period 18-4-2006 to 31-3-2007 on the expenses recharged from the Indian Ernst and Young entities which as per the appellant did not attract any Service Tax. The impugned order is also erroneous and contrary to the law as the amount received by the appellant from the member of the other firms were merely in the nature of cost reimbursement and hence there is no underlying service and the same cannot be made liable to Service Tax of the amount of ₹ 33,49,442/- as confirmed in the impugned order. (v) Learned Advocate also submits that the appellant had recovered from the member firms were in the nature of mere cost reimbursement in respect of boarding, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby Rule 5(1) of the Valuation Rule has been held to be ultra vires under Sections 66 and 67 of the Finance Act. (vi) The respondent has erred in his findings that the appellant has recovered the amount of ₹ 2,73,64,722/- from their member for which the Service Tax has been confirmed. (vii) The imposition of penalty under Section 78 of the Act and was also contested on the ground that there had been no suppression of fact on their part. The reliance was placed on the following decisions : (a) Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462 = 1995 (78) E.L.T. 401 (S.C.)] (b) Continental Foundation Jt. Venture v. Commissioner of Central Excise, Chandigarh - 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriated by the impugned order. As far as the demand of Service Tax which has been confirmed against the appellant undoubtedly pertains to out of pocket expenses which has been reimbursed on behalf of their other firms which has been reimbursed to the appellant. The appellant has rightly contended that these reimbursable expenses is not in the nature of service and, therefore, no Service Tax could have been levied as held in the impugned order. Place reliance for the same in case of Intercontinental Consultants and Technocrats Pvt. Ltd. (supra), wherein Hon ble High Court has set aside the Rule 5(1) of the Service Tax Valuation Rules, 2006. As far as the imposition of penalty on the amount paid by the appellant is concerned, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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