2019 (5) TMI 1483 - AT - Service Tax

Appellate Tribunal rules service tax not payable on architect's travel expenses, citing precedent.

The Appellate Tribunal CESTAT Ahmedabad ruled in favor of the appellant, holding that service tax on travelling expenses charges during the provision of ... Levy of service tax - travelling expenses charges during the course of providing the service of architect - HELD THAT:- The issue is covered by the judgments of M/S. SWAMINATHAN ASSOCIATES VERSUS THE COMMISSIONER OF G.S.T. & CENTRAL EXCISE, COIMBATORE COMMISSIONERATE [2019 (1) TMI 1430 - CESTAT CHENNAI] wherein the Tribunal relies on the Hon’ble Supreme Court Judgment in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT]. In that case it was held that the service tax on “visiting charges” is not payable in the case of Architect Service. Demand set aside - appeal allowed - decided in favor of appellant. Issues involved: Liability to pay service tax on travelling expenses charges during the provision of architect services.Analysis:The judgment by the Appellate Tribunal CESTAT Ahmedabad addressed the issue of whether the appellant is liable to pay service tax on travelling expenses charges while providing architect services. The appellant's counsel cited a previous Tribunal decision in the case of Swaminathan Associates, where a similar issue was decided in favor of the assessee. The Revenue representative reiterated the findings of the impugned order. The Tribunal examined the issue in light of the Supreme Court judgment in the case of Intercontinental Consultants & Technocrats Pvt. Ltd, which held that service tax on 'visiting charges' is not payable for architect services. The Tribunal, based on the precedent set in the Swaminathan Associates case, ruled in favor of the appellant, setting aside the impugned order and allowing the appeal. The Tribunal emphasized that reimbursable expenditure is not to be included in the value of taxable services for the period in question, as per the relevant amendment. It was also noted that penalties could not be sustained due to the issue being a matter of interpretation settled by the Supreme Court ruling, with no suppression or fraud attributable to the assessee. As a result, the appeal was partly allowed, following the principles established in the referenced judgments.This comprehensive analysis of the judgment highlights the legal reasoning behind the decision and the application of relevant precedents in determining the liability for service tax on travelling expenses charges in the context of architect services.