Appellants succeed in tax appeal as Tribunal sets aside demands and penalties, citing legal provisions.

M/s. TVS Logistics Services Ltd. Versus The Principal Commissioner of Service Tax Chennai South Commissionerate

M/s. TVS Logistics Services Ltd. Versus The Principal Commissioner of Service Tax Chennai South Commissionerate - 2021 (50) G. S. T. L. 530 (Tri. - ... Issues:
1. Inclusion of reimbursable charges in taxable value for clearing and forwarding services.
2. Demand under man power supply service for services provided to a recipient in SEZ.
3. Demand under Business Support Service for packing and repacking activities.

Analysis:
1. The appellants were found to have not included reimbursable charges received from customers in the taxable value for clearing and forwarding services, leading to a service tax liability. The department contended that these charges should be included. However, the appellant argued that as per a Supreme Court decision, reimbursable expenses like electricity and telephone charges should not be included in the taxable value. The Tribunal agreed with the appellant, citing the Supreme Court decision, and set aside the demand under this category.

2. The second issue pertained to a demand under man power supply service for services rendered to a recipient in a Special Economic Zone (SEZ). The appellant claimed exemption under a specific notification but failed to produce necessary documents, resulting in the denial of the exemption and a demand for service tax. The Tribunal analyzed the legal provisions and held that the denial of exemption based on procedural requirements of a notification was against the provisions of the SEZ Act. Citing the overriding effect of Section 51 of the SEZ Act, the Tribunal ruled in favor of the appellant and set aside the demand under man power supply service.

3. The third issue involved a demand under Business Support Service (BSS) for packing and repacking activities done by the appellant for exports. The department considered these activities as falling under BSS and demanded service tax. However, the appellant argued that packing and repacking activities constitute "manufacturing" under the Central Excise Act, not a service under BSS. The Tribunal agreed with the appellant, stating that the activity of packing and repacking should be considered a manufacturing activity, not a service under BSS. Therefore, the demand under BSS for these activities was set aside by the Tribunal.

In conclusion, the Tribunal found in favor of the appellants on all three issues, setting aside the demands and penalties imposed by the original authority. The impugned order was held to be unsustainable and was set aside, with the appeals allowed with consequential relief as per the law.