2019 (2) TMI 494 - AT - Service Tax

Dismissal of Appeals on Reimbursed Expenses; Remand on Service Tax Liability

CCE & ST, Chennai Versus M/s. Nippon Express (India) Pvt. Ltd. (Vice-Versa)

The Tribunal dismissed the appeals related to reimbursed expenses, as demands could not be sustained retrospectively based on the Supreme Court's ruling. ... Valuation - includibility of certain amount claimed to be reimbursable expenses - non-discharge of service tax under GTA Service - Held that:- The issue regarding taxability of reimbursed expenditure has been set at rest by the Hon’ble Supreme Court, in the case of Union of India Vs. Intercontinental Consultants and Technocrafts Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA], where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax - demand set aside. GTA Services - Held that:- We are unable to perceive any discussion on the contentions of the assessee as to providing service to SEZ or that appellant did or did not furnish any documents; nor that the appellant’s contentions are correct or incorrect, we are therefore constrained to remand this issue back to the file of the adjudicating authority to pass a denovo adjudication order, after offering reasonable opportunity to the appellants and after considering all such supporting documents placed/to be placed by the assessee - matter on remand. Appeal allowed in part and part matter on remand. Issues:1. Taxability of reimbursed expenses for providing services.2. Service tax liability on GTA services provided to SEZ customers.Issue 1: Taxability of Reimbursed ExpensesThe case involved the appellant providing Custom House Agents services, Storage and Warehouse services, and Business Auxiliary services. Two Show Cause Notices (SCN) were issued proposing to demand service tax on reimbursed expenses and GTA services for the period July 2007 to August 2008. The Commissioner partially confirmed the demand, leading to appeals from both the assessee and the Revenue. The Hon'ble Supreme Court's decision in Union of India Vs. Intercontinental Consultants and Technocrafts Pvt. Ltd. clarified that reimbursable expenses should be included in the valuation of taxable services only from May 14, 2015, onwards. The Court emphasized that legislation is presumed not to have a retrospective operation unless explicitly stated. Based on this ruling, the Tribunal dismissed the appeals related to reimbursed expenses, as the demands could not be sustained retrospectively.Issue 2: Service Tax Liability on GTA ServicesRegarding the service tax liability on GTA services provided to SEZ customers, the appellant claimed that the services were rendered to SEZ customers from July 2007 to September 2008. However, the adjudicating authority noted a lack of documentary evidence supporting the exemption claim. While the appellant argued that all services were consumed at SEZ and provided supporting documents, the Tribunal found a discrepancy in the documents filed. As a result, the Tribunal remanded this issue back to the adjudicating authority for a fresh adjudication order, allowing the appellant an opportunity to submit all relevant supporting documents. The impugned order was set aside, with Revenue's appeals treated as allowed by remand, and the assessee's appeals partly allowed for reimbursable expenses and partly remanded for service tax on GTA services.In conclusion, the Tribunal's decision clarified the taxability of reimbursed expenses and highlighted the importance of providing adequate documentary evidence to support exemption claims, especially concerning service tax liabilities on services provided to SEZ customers. The case emphasized the need for a thorough review of all supporting documents before reaching a final decision on tax liabilities, ensuring a fair and just adjudication process.