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TMI Blog2024 (5) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has been carried away by the freight charges received by appellant on consignment notes issued by appellant for transportation under Goods Transport Agency Agreement. The service tax on the freight charges received by the appellant from M/s.ACCL after issuing consignment notes has already been discharged by M/s.ACCL as the service recipient - it is very clear from the SCN that the demand has been made only in regard to reimbursable expenses received from M/s.ACCL as part of C F activity and not for the freight charges received with regard to GTA Agreement. The issue as to whether the reimbursable expenses is to be included in the taxable value for the period prior to 2015 is settled by the decision of Hon ble Delhi High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts are that the appellant is engaged in providing Clearing and Forwarding Agency Service and Transportation of Goods by Road Services. They have registered with the Service Tax Commissionerate. During the course of audit of accounts of the appellant by the Internal Audit Wing of the department, it was noted that the appellant has entered into a Clearing Forwarding Agency Agreement with M/s.ACC Limited (M/s.ACCL, for short) and also a separate Goods Transportation Agreement. On verification, it was noted that the appellant is reimbursed freight charges by M/s.ACCL incurred by the appellant with regard to the transportation of goods by road as well as the railways carried out as part of C F Agent service. 2. Apart from this, the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re inclusive of freight charges, entry fee, Octroi charges. The appellant was paying service tax on the service fees received from M/s. ACCL as C F Agent. Appellant had not included the expenses reimbursed such as freight charges, Octroi etc. received from M/s.ACCL in the taxable value as these were only reimbursable expenses. The department has confirmed the demand alleging that such reimbursable expenses are to be included in the taxable value. Further, the department has also alleged that the appellant has entered into C F Agency Agreement only to evade the payment of service tax of freight charges. The Ld. Counsel submitted that the appellant had to transport some goods on behalf of M/s.ACCL from their depots to warehouses. These transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod may be set aside. It is also argued that the issue whether reimbursable expenses are to be included in the taxable value was under litigation and had to travel upto Hon ble Apex Court. The issue being interpretational in nature the demand raised invoking the extended period cannot sustain. The Ld. Counsel prayed that the appeal may be allowed. 7. The Ld. A.R Shri Anoop Singh appeared and argued for the Department. Para-3 of the show cause notice was adverted to by the Ld. A.R to submit that the appellant had entered into two separate agreements; one for carrying out the C F Agency Service and the other for Goods Transportation Service. The appellant was receiving freight charges and other charges from M/s.ACCL as reimbursements. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t while carrying out the C F Agency Service was also doing some amount of transportation of goods for M/s.ACCL. The freight charges and other charges in the nature of Octroi, entry fee etc. were incurred by appellant which was reimbursed by M/s.ACCL to them. The department is of the view that appellant has to include these reimbursement charges received from M/s.ACCL in the taxable value in terms of Rule 5 of Service Tax (Determination of Value) Rules, 2006 rad with Section 67 of the Finance Act, 1994. 12. The definition of Clearing Forwarding Agent is reproduced as under : Clearing and Forwarding Agent means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts Technocrats Pvt. Ltd. Vs Union of India (supra) as affirmed by the Hon ble Supreme Court (supra). 15. Following the same, we are of the considered opinion that the demand cannot sustain and requires to be set aside. Ordered accordingly. 16. The Ld. Counsel has argued on the ground of limitation also. The demand has been raised on freight reimbursable expenses accounted by the appellant as per figures indicated in the books of accounts. The Department has not established any positive act of suppression on the part of the appellant. The issue as to whether the reimbursable expenses has to be included in the taxable value was under litigation and also put into a situation of bringing forth amendment under Section 67 of the Finance Act, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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