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of <h1>Dispute Over Reimbursable Expenses in Service Tax Calculation</h1> <h3>Commissioner of Central Excise, Customs and Service Tax, Belgaum Versus Amar Enterprises</h3> Commissioner of Central Excise, Customs and Service Tax, Belgaum Versus Amar Enterprises - TMI Issues:- Inclusion of reimbursable expenses for the calculation of service tax.- Interpretation of Section 67 of the Finance Act 1994.- Applicability of Rule 5 of Service Tax Rules 2006.- Consistency in judicial decisions.Analysis:1. The case involved the question of whether reimbursable expenses incurred by the respondents on behalf of their principal should be included for the calculation of service tax. The Department issued show-cause notices claiming a significant amount as service tax, which was confirmed by the Additional Commissioner. However, the Commissioner (Appeals) allowed the appeal, stating that reimbursable expenses cannot be considered for levying service tax.2. The Department appealed this decision, arguing that a previous order by the Commissioner for an earlier period had remanded the matter to verify the actual reimbursed amounts. The Department contended that the current order was contradictory to the previous one. The Departmental representative reiterated the findings in the Order-in-Original and grounds of appeal.3. The respondents relied on legal precedents, specifically citing the judgment of the Hon’ble Supreme Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. The respondents argued that as per Section 67 of the Finance Act 1994, reimbursable expenses should not be included in the valuation of service tax. They also referred to a previous decision by CESTAT in their own case, supporting the exclusion of actual reimbursement expenses from taxable value.4. Upon hearing both sides and examining the records, the Bench found that the case was squarely covered by the Supreme Court's judgment and the previous decision of CESTAT. The Bench concluded that expenses borne by the respondents and later reimbursed by their principals should not be included for calculating service tax. Therefore, the appeal of the Revenue was dismissed.5. The operative portion of the order was pronounced in open court on 23/07/2018, affirming the decision to dismiss the appeal based on the non-inclusion of reimbursable expenses for service tax calculation.
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