Reimbursable out-of-pocket expenses and gratuity claims require evidence-based verification before inclusion in taxable service value.

Amounts reimbursed as out-of-pocket club expenses are not includible in taxable value if they are proved to have been paid on an actual basis and satisfy the governing Board clarification; here, the documentary record was insufficient, so the inclusion question could not be finally decided. The gratuity-related claim under the welfare scheme also lacked a finding at the appellate stage, so it required fresh examination. The order was therefore set aside and the matter remanded to the adjudicating authority for verification of evidence on reimbursable expenses and reconsideration of the gratuity issue.

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Issues: Whether amounts paid to club agents towards club expenses and gratuity were liable to be included in the gross value of taxable service, and whether the matter required remand for production and examination of evidence.

Analysis: The dispute turned on the applicability of the Board's clarification that out-of-pocket expenses reimbursable on actual basis, such as travelling, boarding and lodging, are not subject to service tax if the prescribed conditions are satisfied. The record showed that documentary evidence had not been produced before the lower authority to establish that the impugned payments were in the nature of reimbursable pocket expenses. A separate contention regarding gratuity payments under the welfare scheme was also raised, but no finding had been recorded on that aspect by the appellate authority. To ensure a fair opportunity, the matter required reconsideration on the basis of evidence.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority to examine the evidence relating to reimbursable pocket expenses and to consider the gratuity issue afresh.

Final Conclusion: The appeals succeeded by way of remand, leaving the liability question open for fresh determination on evidence.

Ratio Decidendi: Amounts claimed as reimbursable out-of-pocket expenses are not includible in taxable value where they are proved to be paid on actual basis and satisfy the governing circular conditions; if such evidence is absent, the matter may be remanded for fresh verification.

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