2017 (9) TMI 90

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....he past many years. The services rendered by them were subjected to service tax w.e.f. 1.5.2006. One of the disputes involved in the present appeal is relating to valuation of the taxable services provide by the appellant. The difference of opinion also is only with reference to such valuation and question of limitation. 2. During the course of providing services as "Recovery Agent" to the client banks, the appellants incurred certain expenditure like parking charges, arrangement of security guards, insurance premium, videography, police escorts, publication in newspaper, etc. The appellant claimed that in terms of the agreement with the banks, these are reimbursed on actual basis. Hence, these expenses are not to be included in the valu....

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.... the impugned order. It is seen that the impugned order as well as the Id. Member (T) placed reliance on the decision of the Larger Bench in Bhagvathy Traders - 2011-TIOL-1155-CESTAT-BANG.LB. The said decision is not a ratio for disallowing reimbursable expenses for exclusion from the taxable service. In fact, the said decision only framed certain guidelines stating that reimbursable expenses can be excluded only when the service provider was not under any obligation to incur such expenses and the same is done on behalf of the service recipient. In other words, the excludability of any expenses claimed to be reimbursed depends on the facts and circumstances of each case and the terms of the agreement relevant to the said case. In the presen....

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....ity or otherwise of expenditure incurred during the course of providing of service is an issue which was subject matter of various litigations including reference to Larger Bench of Tribunal and the decision of the Hon'ble Delhi High Court, mentioned above. It may not be incorrect to say that the whole issue has been subjected to multiple interpretation and also resulting in the Hon'ble Delhi High Court even striking down the provision of Rule 5(1) as ultra virus. Admittedly, the appellants maintained records of all the expenses and the present demand was based on such records. In such situation, I find that the demand cannot be invoked by alleging willful misstatement, fraud and intention to evade payment of tax. Here, the extended....