2019 (5) TMI 159

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d the amount of salaries and wages paid to the persons from the taxable value while discharging the service tax for the period from June 2005 to September 2008. The Department was of the view that the said amount is also includible in the total taxable value as per Section 67 of the Finance Act, 1994 read with Rule 3 of the Service Tax (Determination of Value) Rules, 2006. 2.2 A Show Cause Notice was issued proposing to demand service tax on such amounts such as salaries, wages, etc. After due process of law, the Original Authority confirmed the demand of Rs. 1,75,96,914/- along with interest and also imposed equal penalty under Section 78 of the Finance Act, 1994 along with separate penalty under Section 77 ibid. Aggrieved, the appellant....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on'ble Apex Court, in the said judgement, has observed that Section 67 of the Finance Act, 1994, dealing with 'consideration', is suitably amended by the Finance Act, 2015 with effect from 14.05.2015 to include reimbursable expenses also. Thus, only from 14.05.2015, reimbursable expenses would form part of valuation for discharging service tax. The period involved being from 2005-06 to 2008-09, the demand cannot sustain. (iv) Ld. Counsel for the appellant also argued on the ground of limitation. It is submitted by him that the appellants have not suppressed any facts with intention to evade payment of service tax. They have reflected the amount received by them and also the wages paid to the workers in their accounts as well as the finan....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e appellants have received the amounts from the service recipient and as per Section 67 of the Finance Act, 1994, the gross amounts received by them have to be made the basis for discharging the service tax liability. The gross amounts charged by the appellants include service charges as well as wages. The appellant has deliberately not discharged service tax on the wages part and therefore, is guilty of suppression of facts with an intention to evade payment of service tax. 4.2 To support his argument that wages and Provident Fund contribution are includible in the gross amount charged for payment of service tax, he relied upon the decision in the case of M/s. Neelav Jaiswal & Brothers Vs. Commissioner of C.Ex., Allahabad reported in 201....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the invoices raised by them as also the financial statements. The amount received as salaries and wages by the appellant is shown as expenditure and not as income by them. This goes to show that the appellants were under the bona fide belief that these are reimbursable expenses and would not be includible in the taxable value. 8.2 The issue whether reimbursable expenses are subject to levy of service tax was under litigation and had travelled up to the Hon'ble Apex Court wherein it was settled by the decision in the case of M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. (supra). The Department does not have a case that the appellants did not reflect the amount received by them in the nature of salaries/wages in their accoun....