TaxTMI 
TaxTMI 
2018 (3) TMI 111
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.... During the course of verification of accounts, it was noticed that the assessee excluded certain charges from the gross receipt for the purpose of arriving at the taxable value on the ground that these charges are in the nature of reimbursement of expenses incurred by them. Show cause notice was issued proposing to demand service tax of Rs. 1,84,25,001/- on the said charges realized during the period April 2007 to March 2008. After due process of law, the Commissioner confirmed the demand of Rs. 1,40,421/- along with interest and imposed penalty under section 76 of the Finance Act. Hence this appeal by the department. 2. On behalf of department, ld. AR Shri K. Veerabhadra Reddy reiterated the grounds of appeal. He submitted that the findi....
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.... clarification implies that expenses which form part of CHA services are not to be excluded. The Commissioner has erred in not applying the provisions of law as well as the Board s Circular. He therefore pleaded to set aside the impugned order and confirm the demand raised in the show cause notice. 3. On behalf of the respondent, ld. Chartered Accountant Shri P.C. Anand appeared and argued the matter. The respondent / assessee had incurred several expenditure which were reimbursed while providing service as a custom house agent. The department seeks to include all these charges in the value of taxable services. The Commissioner while adjudicating the show cause notice has taken cognizance of the departmental clarification issued in Circula....
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....s of Commissioner is given in the table reproduced below:- S.No. Description of reimbursable expenditure Reasons for considering it as coming under Pure Agent 1. Airport Dues i) Scrutiny of invoices as listed in para 4.2 above which are representative in nature confirms that the assessee recovers the expenses on the basis of bills provided by the third party. ii) No mark up or margin has been made by the assessee. iii) The nature of services also indicates that these services were not used by the assessee for his own benefit. iv) These charges were incurred by them on behalf of the importer / exporter. v) The reimbursement of expenses was shown separately in the invoice. vi) In each bill, evidence like Bill of Entry No. / Container No....