Service tax valuation excludes reimbursed and notional facility expenses; demand based on their inclusion was set aside.

Accommodation, medical, vehicle running and maintenance, telephone, dog squad and stationery expenses were held not includible in the taxable value for service tax where they represented reimbursements or notional facility values provided by the service recipient. The Tribunal followed earlier decisions in the assessee's own cases and other rulings to hold that such amounts do not form part of the assessable value. On that basis, the demand based on their inclusion was unsustainable, and the extended period demand was also treated as not maintainable on the facts already accepted in the prior decisions. The disputed additions were therefore rejected and the demand was set aside in favour of the assessee.

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Issues: Whether expenses incurred towards accommodation, medical expenses, vehicle running and maintenance, telephone, dog squad and stationery were includible in the taxable value as consideration for service tax.

Analysis: The Tribunal noted that the controversy stood covered by earlier decisions in the appellant's own cases and by other Tribunal rulings holding that such reimbursements and notional values for facilities provided by the service recipient do not form part of the assessable value for levy of service tax. On that basis, the demand founded on inclusion of these expenses in consideration was found unsustainable, and the appeal was also governed by the prior view that the extended period demand could not be sustained on the facts accepted in those decisions.

Conclusion: The disputed expenses were not liable to be added to the taxable value, and the demand was set aside in favour of the assessee.

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