Appeal Partially Allowed: Service Tax on Reimbursable Expenses Under CHA Set Aside; BAS Commission Demand Partially Upheld.

The Tribunal partially allowed the appeal, setting aside the demand for service tax on reimbursable expenses under Custom House Agent (CHA) services, as these are not taxable. Additionally, it annulled the demand on Business Auxiliary Service (BAS) commission covered by an exemption notification. The remaining demand on BAS commission was upheld, modifying the impugned order.

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Issues:
1. Demand of service tax on CHA service including reimbursement of expenses.
2. Demand of service tax on Business Auxiliary Service (BAS) commission.

Analysis:
1. The appellant, engaged in Custom House Agent (CHA) service, was issued a show cause notice demanding service tax and penalties. The Adjudicating Authority confirmed the demand, leading to an appeal. The appellate authority upheld the demand for service tax under CHA service and BAS, along with penalties. The appellant contended that reimbursement of actual expenses is not taxable under CHA service, citing relevant judgments. The Tribunal noted that reimbursable expenses, other than service charges, are not liable for service tax, relying on legal precedents. Consequently, the demand on reimbursable expenses was set aside.

2. Regarding the demand on BAS commission, the appellant argued that it was not taxable under a specific notification. The Tribunal agreed, setting aside a portion of the demand covered by the exemption notification. The remaining demand on commission was upheld. The impugned order was modified accordingly, partially allowing the appeal. The Tribunal's decision was based on careful consideration of submissions and legal principles, ultimately providing relief to the appellant on certain aspects of the service tax demand.

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