2011 (8) TMI 1110

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....of-pocket expenses and the rest of the demand is on a certain amount collected by the appellant in foreign currency from M/s. Jone Lang Lasalle Americas, Chicago in June, 2003. According to the Revenue, the out-of-pocket expenses incurred by the appellant as travelling expenses, hotel expenses, etc., were incurred for the purpose of rendering the above service to the service recipients and the same were actually reimbursed to the former by the latter and hence includible in the gross taxable value of the service for the purpose of payment of service tax. Accordingly to the appellant, these expenses were not to be included in the taxable value of the service. With regard to the foreign exchange involved in this case, the case of the Revenue ....

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....e notice, apart from setting up a challenge to the demand of service tax and to the proposal for imposing penalty. In his reply, the appellant referred to Trade Notice No. 7/97-S.T., dated 4-7-1997 issued by Mumbai Commissionerate-I wherein it was clarified that any deductions including out-of-pocket expenses from the value of taxable service would be admissible only on documentary evidence adduced by the concerned person. The assessee in the reply also relied on Circular No. B-11/1/2002-TRU, dated 1-8-2002 wherein it was clarified that reimbursible expenses (on actual basis) such as port fees would not be chargeable to service tax in respect of cargo handling service. Ld. Chartered Accountant for the appellant submits that they were led to....

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....rtue of Notification No. 21/2003-S.T. When the service was actually rendered, there was exemption from payment of service tax by virtue of Notification No. 6/99-S.T. Hence the appellant would plead that they were not liable to pay service tax on the amount collected from the foreign company. It is pointed out that this case of the appellant was clearly pleaded in the reply to the show cause notice. 3. We have also heard ld. SDR on the point of limitation. He has submitted that evasion of tax by the appellant was found out by the auditors of the Department in February, 2004 and that the material information was never disclosed by the party. According to the ld. SDR, the plea of limitation is only liable to be rejected. 4. Aft....