TaxTMI 
TaxTMI 
2019 (2) TMI 1108
X X X X Extracts X X X X
X X X X Extracts X X X X
....are that the assessee is engaged in providing Storage and Warehousing Service, Custom House Agent Service, Port Service, Clearing and Forwarding Service, etc., and are registered with the Department. 2.2 During the course of audit of accounts, the following observations were made : a) Non-payment of service tax on reimbursable expenses in respect of CHA service for the period from 18.04.2006 to 31.03.2008; b) Non-payment of service tax on Maintenance and Repair work of containers for the period from July 2003 to March 2008; c) Short payment of service tax on Storage and Warehousing Service for the period from April 2003 to March 2007; and d) Non-payment of service tax on Cargo Handling Service for the period from April 2003 to March 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....emand of service tax is raised on the amount totally collected from the customers. 3.1.2 It is not the assessee, but the contractor who performs the service of Maintenance and Repair on the containers and also discharges the service tax on Maintenance and Repair Services. The assessee having not carried out any Maintenance and Repair Service, is not liable to pay service tax under this category. The amount that is billed by the assessee for Maintenance and Repair of the containers is only a margin, which is the profit made by the assessee. This is not a consideration for the service since the service of Maintenance and Repair is performed only by the contractor, who has discharged the service tax on the said activities. 3.1.3 He adverted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmissioner of C.Ex., Salem - 2017 (48) S.T.R. 97 (S.C.). 3.1.5 The Maintenance and Repair contract is a composite contract involving transfer of property in goods and hence, the same cannot be vivisected for the purpose of levy of service tax. The assessee has discharged the service tax on the labour portion for the normal period i.e., from 01.04.2006 to 31.03.2007, even though they are not liable to pay service tax. 3.1.6 It was also argued by the Ld. Counsel that extended period is not invokable since the assessee was under a bona fide belief that service tax is not applicable as they have not actually performed any Maintenance and Repair Service. All the details have been taken from the assessee's Books of Accounts and therefore, there....
X X X X Extracts X X X X
X X X X Extracts X X X X
....epair work to be done. After obtaining approval of the repair works by the liner, the repair works are done. After completion of these repair works, invoices are raised by the sub-contractors along with supporting documents for payment and the assessee, in turn, raises bills on the liners. It can be seen that the assessee engages contractors to perform the work of Maintenance and Repair of the containers. Margin on the material and labour component raised by the appellant is the payment towards the services. He therefore submitted that the assessee cannot contend that they have not performed any repairing activity and it is the assessee who is liable to pay service tax. 4.2 Ld. AR gave us an example of a building under construction and sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the materials, etc. It is not the case that the invoice has been raised to the customer of the assessee directly by such contractor. 6.3 Merely because the assessee has outsourced the activity of washing and repair of containers to another, it cannot be said that they have not provided any services. The document issued by the assessee to the customer shows that the bills are raised for washing and repairing of containers. We hold that the assessee is liable to pay service tax under this category. 6.4.1 However, from the document, it appears that the assessee has billed a consolidated sum to the customer, which includes material costs as well as taxes paid by the contractor. The quantification of demand under this category is therefore....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rmed under this category and therefore, the same is upheld. 9. With regard to the appeal filed by the Department against the dropping of demand on reimbursable expenses, we have to say that since the same are actual expenses, they are not includible in the taxable value. The issue stands covered by the decision in the case M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. (supra). The Department's Appeal is therefore devoid of merits and liable to be dismissed, which we hereby do. 10. Ld. Counsel has also argued to set aside the penalties. We find that the issue whether reimbursable expenses are includible in the taxable value was under litigation for a long time. Therefore, being an interpretational issue, the penalty imposed u....