Service tax valuation excludes reimbursable expenses; remaining disputed demands were remanded for fresh adjudication.

Reimbursable expenses received on actual basis were held outside the taxable value of clearing and forwarding agent service, because section 67 of the Finance Act, 1994 taxes only the gross amount charged as consideration for the taxable service and not separate client reimbursements incurred on behalf of the client. The valuation principle was applied to exclude amounts that were independently identifiable as actual expenses. The remaining service tax disputes, including business auxiliary service and alleged franchisee liability, were remanded for fresh adjudication because the record did not fully address those heads and the factual quantification required verification.

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Issues: (i) Whether reimbursable expenses received on actual basis formed part of the taxable value of clearing and forwarding agent service for service tax. (ii) Whether the matter required remand for reconsideration of the remaining service tax demands.

Issue (i): Whether reimbursable expenses received on actual basis formed part of the taxable value of clearing and forwarding agent service for service tax.

Analysis: The remuneration for clearing and forwarding agent service was separately identifiable in the agreement, while the additional amounts were actual expenses incurred on behalf of the client and reimbursed separately. The valuation principle under section 67 of the Finance Act, 1994 permits levy only on the gross amount charged for the service actually rendered, and reimbursable expenditure not forming part of the service consideration cannot be added to the taxable value. The decision followed the principle that rules cannot enlarge the scope of the charging provision and that only the consideration for the taxable service is includible.

Conclusion: Reimbursable expenses were not includible in the taxable value of clearing and forwarding agent service.

Issue (ii): Whether the matter required remand for reconsideration of the remaining service tax demands.

Analysis: The record showed that the impugned order did not clearly and fully address the other disputed heads, including business auxiliary service related demands and the alleged franchisee liability. Since the factual matrix and quantification required fresh verification, the existing order could not be sustained in its present form for those aspects.

Conclusion: The matter was remanded to the adjudicating authority for fresh adjudication of the remaining issues.

Final Conclusion: The assessee obtained relief on the valuation question concerning reimbursements, but the controversy as a whole was sent back for fresh decision after verification of the remaining demands.

Ratio Decidendi: For service tax valuation, only the amount charged as consideration for the taxable service is includible, and reimbursable expenses incurred on behalf of the client do not form part of the gross amount charged unless the statute expressly so provides.

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