TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 374
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....ounts so received as seen in the ledger accounts maintained by them in respect of each client for the aforesaid services. The amounts received by them were actually the input taxable services rendered by them/cost of Government dues/charges, which had been billed by them and were to be included in the gross amount charged and which had been broadly classified as Cargo related charges, Customs Cess charges, Customs Light Dues charges, Customs Overtime charges, Hire of Launches charges, MP-Child Labour charges, M.V. Bulk Prosperity charges etc. The lower authorities issued a show-cause notice for the demand of Service Tax on the amounts received for the said services as also sought interest, besides seeking to impose penalties. Respondent contested the show-cause notice on merits and also on limitation. The adjudicating authority after considering the evidence produced by the respondent during the course of personal hearing, came to the conclusion that amounts received for the said services are reimbursement. Accordingly, by reasoned order he dropped the proceeding initiated by the show-cause notice. 3. Learned Special Counsel appearing on behalf of the Revenue would draw our attent....
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....or the respondent to act as a pure agent to incur expenditure or cost in the course of providing the taxable service. It is his submission that nothing is brought on record to show that Mormugao Port Trust could not claim the charges for the services from the respondents principle. It is his submission that in the case of Sri Bhagyavathy Traders Vs. Commissioner of Central Excise, Cochin - 2011 (24) STR 290 (Tri.-LB), it has held that only when service recipient is having obligation legal or contractual, to pay certain amount to any third party and said amount is paid by the service provider on behalf of the service recipient, question of reimbursement arises. He would also submit that adjudicating authority has erred in dropping the proceeding on the ground of limitation also; he urged the appeal filed by the Revenue be allowed. 4. Learned Counsel appearing on behalf of respondent would submit that they had justified the claim that the amount received for the said services was reimbursement charges on actual basis. It is his submission that the rigours with Rule 5(2) of the Service Tax Determination of Value Rules, 2006 are complied with as is accepted by the adjudicating author....
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....but authorizations, the noticee acted on behalf of their principals by way of arranging/organizing related activities through third parties for loading/unloading of vessels and in turn effecting payments to the Govt. Departments, statutory Bodies and others. 23. As per case records (Annexure-B to the Written submissions at the time of P.H. held on 30.08.2012), I find that nature of expenses incurred and payments made by the noticee on behalf of their principals and classified/categorized as Cargo related charges, Customs Cess charges, Customs Light Dues Charges, Custom Overtime Charges, Hire of Launches Charges, MP-Child Labour charges, M.V. Bulk Prosperity charges, M.V. Dona Paula Expenses, Ship Agency Income, Shipment Income, Vessel related charges, Wagon Freight Charges, Wharf Dues & Plot Rent, W.O.B.-Shipment charges is described in detail as below. Sr. No. Account Head Category Nature of Payment To whom payment was made by the noticee 1 Cargo related charges Cargo dues for loading of vessels at Mormugoa and Panjim Port Mormugoa Port Trust/Captain of Ports 2 Customs Cess Customs Cess during loading of Cargo Commissioner of Customs & Central Excise 3 Customs ....
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....e Mormugao Port Trust and few private bodies. As it can be seen that the amounts paid to the Commissioner of Customs and Central Excise towards Customs Cess, Custom Overtime and Custom Light Dues are statutory in nature and payable as per enactments thereby the same are outside the purview of Service Tax provisions and Service Tax is not recoverable on the said amounts. Also seen that the noticee paid substantial amounts to Mormugao Port Trust, Captain of Ports and South Central Railway towards services as mentioned above on behalf of their principals. These organizations are either Govt. Departments or Statutory Bodies created for rendering specific services which are distinct and different from the taxable services being provided by the notice. Sample copies of invoices of Mormugao Port Trust produced by the noticee during the course of personal hearing showed that Mormugao Port Trust are recovering Service Tax under different categories on amounts collected towards their taxable services since they are registered with Service Tax wing of this Commissionerate. The services rendered by Mormugao Port Trust are distinct and different form the services of the Noticee as can be seen. ....