TaxTMI 
TaxTMI 
2011 (5) TMI 140
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent shown as commission/service charges from M/s. Whirlpool India Ltd. Apart from this the appellant was also receiving amounts from M/s. Whirlpool India Ltd. under different heads like service charges for employees, freight for distribution/transportation of goods, loading/unloading of goods, phone expenses, postage and courier, repair and maintenance, printing and stationery, octroi, detention charge, electricity and water, pre-dispatch inspection charges, packing charges, conveyance charges, staff welfare charges, rent and other miscellaneous expenses. They were paying service tax only on accounts shown as commission/service charges received from M/s. Whirlpool India Ltd. 2. The Appellant was responsible for forwarding of goods as per....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide his order dated 3-7-2007, set aside the demand of service tax on transportation charges, inward/outward charges, freight charges, godown rental charges and salary for clerks. On other items, the Commissioner (Appeals) confirmed the tax demanded. Further, he held that penalties imposed under sections 76, 77 and 78 are not justified and penalties were set aside. 5. The assessee as well as the department are aggrieved by the order of the Commissioner (Appeals). The assessee, has filed Appeal No. 652/07 praying that the demands confirmed by the Commissioner (Appeals) should be set aside giving them the full relief. The Department has filed Appeal No. 637/07 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in relation to the services provided by a clearing and forwarding agent to a client for rendering services of clearing and forwarding operations in any manner shall be deemed to be the gross amount of remuneration or commission (by whatever name called) paid to such agent by the client engaging such agent." 9. The Advocate for the assessee relies on various circulars of the Board stated to the effect that reimbursable expenses and out of pocket expenses will not form part of the value on which the service tax will have to be paid. The circular relied upon is reproduced below: "F.No. B.11/1/2001-TRU, 9th July, 2001 5. A point has been raised that the service provider, namely, an actuary, an intermediary or insurance intermediary or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in relation to the services provided by clearing and forwarding agent to a client for clearing and forwarding operation in any manner shall be gross amount of commission by whatever name called, paid to such agent by the client engaging such agent. 12. The learned DR states that by calling the consideration received by different names, it cannot become a reimbursable expense. In the case of reimbursement under the heading freight charges, he specifically argues that what is charged is not actual freight but some amount in the name of freight and in the circumstances, such charges cannot be excluded from the value of taxable services rendered. It is argued that without engaging clerks and utilizing telephones and having godowns for storin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f value of service should be the criteria laid down by this Tribunal in the case of Naresh Kumar & Co. Ltd. (supra). The Appellant could not have provided the service of C&F agents without employing clerks or having a telephone in his office. Even if these expenses are separately billed to the client, the expenses will form part of the value of taxable service. However, cost of transportation is on a different footing. Transportation is a service provided by the person operating the vehicles. There is no proof adduced that the appellant had the responsibility to deliver the goods at the door step of the client. In the case of freight revenue also conceded that it can be considered as reimbursable expense so long as actual freight amounts ar....