TaxTMI 
TaxTMI 
2019 (11) TMI 304
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....ve not discharged full service tax. Accordingly show-cause notice dated 09.02.2007 covering the period 2001-02 to 2005-06 and show-cause notice dated 22.10.2007 covering the period April 2006 to March 2007 were issued. 2. Both the show-cause notices were adjudicated by the Commissioner by order-in-original No. 4/2008 dated 29.05.2008. On appeal by the assessee, Tribunal vide Final Order No. 314/2009 dated 25/03/2009 remanded the matter for denovo adjudication. The denovo adjudication order-in-original No. 26/2009 dated 27.11.2009 issued by the Commissioner confirmed the demands raised in the aforesaid show-cause notices along with interest and imposed penalties. Aggrieved by this order, the present appeals are filed. 3. At the heart of the dispute lies the remuneration received by the appellant assessee under various heads as follows: Sl No. Heads of payment Nature of payment 1. Remuneration fixed Remuneration for services of CFA 2. PDP Remuneration Remuneration paid to CFA based on achievement in r/o Company's dispatch plan to RSs 3. Handling expenses Primary handling: unloading at the depot Secondary handling: Loading into trucks from the depot 4. Mis....
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....ent of the stock in the depot which is not part of their CFA activity and therefore the amounts paid under this head cannot be included in the taxable amount for CFA services. With regard to EDP expenses (Sl No. 6 of the table) it is their contention that the computer stationery, cartridges, maintenance of computers are all in the godown and the expenses incurred with respect to these by them are reimbursed by the principal M/s HLL cannot form part of the value of taxable service. Their contention with respect to the bank charges (Sl No. 7 of the table) is that they pertain to DD charges and messenger charges etc. and the temporary salesmen expenses (CAS expenses) (Sl No. 8 of the table) cannot be included in the value of taxable services rendered by them. In short they would urge that Sl No. 4 to 8 above are not includable in the taxable value as they are in the nature of reimbursable expenses incurred by them on behalf of M/s HLL and reimbursed by M/s HLL. As far as the Sl No 9 to 11 above, namely primary freight , secondary freight and service charges paid to them by M/s HLL are concerned, it is the contention of the assessee that in addition to the CFA agreement they also have ....
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.... goods belong to and are the property of the Company. 9) The C&F Agent shall be responsible for the safety of the goods entrusted by the Company from the time of receipt of the goods till such goods are issued out of the godown as per instructions of the Company. The C&F Agent shall be liable to make good any loss caused to the Company as a result of pilferage, theft, robbery or damage or destruction of the goods excluding acts of God. 10) While receiving the goods for stocking, the C&F Agent shall verify that the goods are in good condition. If for any reason damage or injury to the goods is noticed the C&F Agent should promptly record itsassessment of the damage and obtain the signatures of the Carriers. A record in this regard shall be communicated promptly to the Company to enable the Company to take up follow up action. If the goods are received by rail, or any other mode of transport, the C&F Agent should take open delivery whenever loss or damage to the goods in transit is noticed or suspected. Steps should be taken by the C&F Agent for prompt preference of claim with Railways. The C&F Agent will remain liable to keep the Company indemnified against any loss or damage ....
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....ssessee. This being part of core of their CFA operations, amounts received under this head cannot be excluded from the assessable value for CFA services. Regarding the EDP expenses he would urge that computer stationery, cartridges, maintenance of computers are necessary for the assessee to perform one of their vital functions under the CFA agreement namely generation of invoices. For this purpose they incurred expenses which are paid by HLL to them. It is inconceivable that the CFA services can be rendered without incurring these essential services. He would also urge that bank charges CASM expenses are also similarly incurred by the assessee as part of their CFA activities. 6. He would urge that merely because the charges are paid in various heads by the HLL they did not get excluded from the taxable value. He would rely upon the order of the Tribunal Ahmedabad in the case of Modern Business Solutions [2019(24)GSTL 353 (Tri-Ahmd)] in which on a similar case it has been held that "the claim for reimbursement towards rent for premises, telephone charges, stationery charges etc., amounts to a claim by the service provider that they can render such services in vacuum. What are costs....
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.... could have sought clarifications. All this shows that appellant had an intention to evade payment of service tax. They cannot wait for the department to come and knock at his door to discharge the service tax. Therefore he would pray that Revenue's appeal may be upheld and the assessee's appeal may be set aside. 9. We have considered the arguments of both sides and perused the records. The short point to be decided is whether the appellant is liable to pay service tax on various amounts enumerated at Sl No 3 to 11 in the table above on which they had not discharged service tax. It also needs to be determined whether extended period of limitation can be invoked and whether penalties can be imposed. We proceed to examine these various heads of payment. (1) Handling expenses: This amount has been paid for primary handling namely unloading at the depot and secondary handling i.e. loading into the trucks from the depot. The job of a C&F Agent includes receiving, storing and dispatching the goods. Needless to say receiving and dispatching would involve unloading and loading of trucks for the purposes. It is not in doubt that these activities are undertaken at the depots which are the....
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....ncludible in the assessable value. (5) Bank charges and CASM expenses: It is not clear as to what these charges specifically pertain to from the records. Therefore, we do not find sufficient evidence on record to say that these are input services for rendering of C&F agent services by the appellant. (6) Primary freight secondary freight and service charges:- We find from the C&F Agent agreement that it does not include transportation of the goods as part of the service to be rendered. It is the case of assessee that they have a separate agreement with M/s HLL for transportation of goods which is not part of the CFA agreement. This can only be considered as Goods Transport Agency service. If amounts have been received for GTA services rendered by the appellant, the liability for discharging service tax on such services rests with the service recipient namely M/s HLL as per Section 68(2) of the Finance Act 1994. Learned counsel for the appellant assessee submits that M/s HLL have already discharged service tax under reverse charge mechanism on these GTA services. We do not find any evidence to the contrary. At any rate, if these are GTA services no service tax can be demanded fro....