Reimbursable expenses and service tax: Tribunal accepted a prima facie assessee-favourable view for stay and pre-deposit relief.

For stay purposes, the Tribunal examined whether service tax was prima facie leviable on reimbursable expenses when deciding pre-deposit and recovery relief. It noted that earlier Tribunal rulings had treated reimbursable expenses as outside service tax and that no legal basis was shown to distinguish those decisions. On that prima facie view, the issue was treated as covered in the assessee's favour for the limited purpose of the stay application, and waiver of pre-deposit with stay of recovery was granted.

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Issues: Whether service tax is prima facie leviable on reimbursable expenses for the purpose of directing pre-deposit and whether waiver of pre-deposit and stay of recovery should be granted.

Analysis: The order records that earlier Tribunal decisions had held that reimbursable expenses are not subject to service tax and that the Commissioner (Appeals) had not shown any legal basis to distinguish those rulings. On that prima facie assessment, the Bench found that service tax was not leviable on reimbursable expenses for the limited purpose of the stay application and treated the issue as covered in the assessee's favour.

Conclusion: The assessee was granted waiver of pre-deposit and recovery was stayed.

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