2015 (7) TMI 591

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....he appellant, M/s. Link Intime Spectrum Registry Ltd., by including the value of reimbursable expenses incurred by the appellant in the value of taxable services rendered. Further, penalties have been imposed on the appellant under the provisions of Sections 76 and 78 of the Finance Act, 1994. Aggrieved of the same the appellant is before us. 2. The learned Chartered Accountant appearing for the appellant submits that the appellant is a Share Transfer Agent ('STA' in short) and Registrar to an Issue ('RTI' in short). As a RTI, it acts an agent of a company in processing application for shares, dispatching allotment letters, refund orders, certificates and other related documents in respect of the issue. As an STA, it acts a....

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..... Secondly, reimbursement of expenses and postage is not taxable and hence the demand confirmed in the impugned order is not sustainable. Reliance is placed on the decisions of this Tribunal in the case in of Ankit Consultancy Ltd. 2007 (6) STR 101; Sathguru Management Consultants Pvt. Ltd. 2007 (7) STR 654 and Cameo Corporation Services Ltd 2008 (110 STR 161). 2.2 As regards the period 01/05/2006 to 31/05/2006, it mainly comprises demand on postage which is not payable, since the relationship between the appellant and its client is that of an agent and principal and postage amounts to 'duty chargeable for the transmission by post of postal articles' in terms of Section 2(f) of The Indian Post Office Act, 1898. 2.3 As regards the ....

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....en in respect of stamp duty and security transaction tax, the same would apply to other reimbursable expenses incurred as 'pure agent'. Accordingly, it is pleaded that the impugned demands be set aside and the appeal allowed. 3. The learned Commissioner (AR) appearing for the Revenue reiterates the findings of the adjudicating authority and submits that in terms of Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, expenses or costs which are incurred by the service provider in the course of providing the taxable services, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax on the....

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....tion in law that service tax cannot be levied on an amount charged as tax since the same is not a consideration for rendering any service. Postage is an amount received by the postal department for transmission by post and cannot be considered as a consideration received by the person who is the sender of the postal article. Further, when the postage is recovered from the service receiver on actual basis by a service provider, he acts as a pure-agent and, therefore, the reimbursements made to a pure-agent is not includible in the value of taxable service rendered, as what is provided under Section 67 of the Finance Act, 1994 is only the consideration received for the value of services rendered. Same is the position with respect to the cost ....