Appeal allowed based on judicial precedents excluding travel expenses from service tax liability.

The appeal was allowed, with consequential relief, if any, based on judicial pronouncements and precedents cited. The Tribunal held that reimbursable travel expenses need not be included in the service tax liability, emphasizing the unsustainability of the impugned order. The appellant's argument that the reimbursed travel expenses should not be part of the service tax liability was supported by sample invoices and judicial decisions, leading to the overturning of the original order alleging contravention of the Finance Act.

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Issues:
- Failure to pay service tax on travel expenses recovered from service-recipient
- Interpretation of Section 67 of the Finance Act, 1994
- Applicability of judicial precedents on reimbursable expenses for service tax liability

Issue 1: Failure to pay service tax on travel expenses recovered from service-recipient
The appeal was against an Order-in-Appeal passed by the Commissioner of Central Excise, Pune, alleging contravention of provisions of Section 68(1) read with Section 66 of the Finance Act, 1994. The appellant had incurred travel expenses, recovered from the service-recipient, but failed to pay service tax on these expenses. A show cause notice was issued demanding service tax amounting to Rs. 1,11,103 along with interest and penalties under Sections 73(1), 75, 76, 77, and 78 of the Finance Act. The appellant appealed the order before the first appellate authority, which upheld the original order, leading to the current appeal.

Issue 2: Interpretation of Section 67 of the Finance Act, 1994
The appellant contended that the reimbursed travel expenses incurred by employees for providing services should not be included in the service tax liability. The appellant cited sample invoices and referred to a tribunal decision and a judgment by the Hon'ble Delhi High Court to support their argument. The Departmental Representative argued that as per Section 67 of the Finance Act, the gross amount charged for services should be considered for service tax liability, including any amount collected over and above the billed service charges.

Issue 3: Applicability of judicial precedents on reimbursable expenses for service tax liability
The Tribunal analyzed the sample invoice showing separate charges for inspection, service, and actual travel expenses. Referring to a previous tribunal order, the Tribunal noted that reimbursable travel expenses need not be included in the service tax liability. The Tribunal cited various decisions and Board instructions supporting this view. It was emphasized that the impugned order was unsustainable in law, and the appeal was allowed with consequential relief, if any, based on the judicial pronouncements and precedents cited.

This comprehensive analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the legal interpretation and application of relevant provisions and judicial precedents.

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