AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 85
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....e tax on the turnover achieved by Tiems Telecom (P) Ltd. (a company) having separate Service Tax registration number; and (ii) whether the appellant is entitled to deduction for reimbursement of certain expenses from the principal under the provisions of Section 67 of the Finance Act. 2. The brief facts are that a Ltd. Company - Tiems Telecom (P) Ltd. had entered into a contract for providing services with M/s. Aircel Digilink India Ltd. which subsequently became M/s. Vodafone Essar Digilink Ltd. after merger with Vodafone. The said company was registered with the Service Tax Department and was carrying on business since 2004-05. The appellant started business w.e.f. 14-2-2008. 3. SCN dated 15-10-2010 was issued to the appellant for t....
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.... for service tax prior to 14-2-2008 which issue has been left undecided as per observation in the order in appeal, that the said ground was not pressed. Upon reconsideration, the adjudicating authority allowed credit of Rs. 1,21,825/- out of the total demand and confirmed the balance demand of Rs. 1,06,450/-. Being aggrieved the appellant preferred the appeal before the Id. Commissioner (Appeals), who vide the impugned order dated 10-8-2015, insofar as the issue of non-taxability of receipts in the nature of reimbursement is concerned, rejected the claim observing as follows :- "However, it is the point of the appellant that the amount of demand is inclusive of the amount of reimbursement of expenses; that the service tax is payable only....
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....ployees, and 'Rent Charges' which, according to the appellant, stands for the rent of premises used by the appellant for the purpose of business. The appellant has thus claimed that in the 'statement of account', whatever amount is mentioned against the 'reimbursement' or 'FOS', same should have been excluded from the service tax because these amounts are in the nature of 'payment of actual expenses', involving no service per se, hence these cannot be covered under service tax provisions. (5.3.2) I agree with the appellant, in principle, that the service tax is not chargeable on the amounts of 'reimbursement' & 'FOS'. However, as already stated, the terminologies used in the said 'st....
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....ar that M/s. ADIL will make no other payment to the teleshop owner, except the 'Commission' at the standard commission rates. This clarifies that, except the 'commission', no other payment, including the 'reimbursement' or 'FOS', is to be made by M/s. ADIL to the appellant. (iii) Point No. 7.6 of the 'Tele Shop Agreement' provides for an 'Operating Manual', which is a part of said 'Tele Shop Agreement' and attached therewith as Annexure IV of the agreement. A combined reading of point Nos.1(d), 1(e) & 1(f) of such Operating Manual', provides for the teleshop owner to ensure that he employs such number of persons, possessing such qualification and experience, as may be felt....
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....nt which may clarify the 'nature' of such transaction, or any certificate from their Principal which may establish that any 'reimbursement' was actually made to them. The appellant, in their written statement dated 28-4-2015, has given a point that the 'statement of account' of Vodafone clearly states that no service tax was paid by the company on reimbursement of expenses, hence tax demand cannot be raised on the entire amount. However, I find that in the entire length of said 'statement of account', no amount is mentioned in the name of service tax, hence it is not understandable as to why the appellant has given such point which is manifestly contradicted by the referred document itself. In any case,....