AI Drafter 
TaxTMI 
TaxTMI 
2020 (7) TMI 653
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.... 2. The internal audit link of the Department conducted audit of statutory records of the appellant and formed a view that taxable value has not been declared truthfully by the appellant. The Department was of the view that appellant adopted a novel modus operandi by which it bifurcated the amount received by it from various service recipients under two different category of services i.e. 'Clearing and Forwarding services' and 'Goods and Transport Agency service'. The Department after detailed scrutiny of the financial ledgers and profit and loss account of the appellant for the period 2007-2008 to 2011-2012 reached a conclusion that the appellant had not declared the taxable value correctly as gross receipts as per section 67 of the Finance Act, 1994 for the purpose of payment of Service Tax. The Table below makes the entire allegations apparent by a simple glance at the same. S. No Year Gross receipt as per P&L A/c Taxable value under C & F agent service Rate of tax ST payable ST paid Difference service tax payable 1 2 3 4 5 6 7 8 1 2007-08 36893376 36670191 2.36% 4532436 918044 3614392 2 2008-09 ....
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....11 5,43,30,051 2,51,72,099 2.91,57,952 1,76,69,535 1,14,88,417 10.30% 11,83,307 2011-12 6,71,24,301 2,82,08,239 3,89,16,062 2,62,93,239 1,26,22,823 10.30% 13,00,151 23,95,67,747 11,16,86,641 12,78,81,106 7,45,45,480 5,33,35,626 59,32,070 6. The learned advocate appearing for the appellant has contended that amount of Rs. 5,33,35,626/- as per above table on which it has been alleged that no service tax had been paid are primarily receipts on account of following two items: (i) The appellant received an amount of Rs. 93,96,803/- from principal companies, who are the service recipients, towards the reimbursable expenses made by the appellant in the nature of depot expenses, weighing of machine charges, empty cartons charges, diesel expenses, house keeping expenses etc. It has been contended by the learned advocate that the reimbursement of expenses in the course of providing clearing and forwarding service are not subject to levy of Service Tax as has been held by various Courts. The learned advocate has referred to following judgements in this regard. 1. Union of India vs. M/s. Intercontinenta....
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....ax due on transportation of consignment has been paid or is payable by a person liable to pay service tax, the service tax should be not charged for the same amount from any other person to avoid double taxation. Since the entire service tax has been paid by the service recipient on the Goods and Transport Service provided by the appellant to the principal companies, no service tax liability arises on the appellant. 7. The learned advocate also contended that entire demand is also barred by limitation as no malafide intention, suppression of facts, wilful mis-statement or intent to evade the payment of service tax, is present in the present matter. It has further been added that it is purely a matter of interpretation and therefore, the proviso is not invokable in the present case. The appellant has relied on following judgements in support of this contention: 1. Ispat Industries vs. CCE, Raigarh [2006 (199) ELT 509(Tri-Mum)]; 2. NRC Ltd. vs. CCE, Thane I [2007 (2009) ELT 22 (Tri-Mum)] 8. We have also heard the learned Departmental Representative who has vehemently supported the findings given in the Order-in-Original. 9. After considering the submissions....
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....iture or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the Learned Counsel for the Department that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 and, therefore, has to be prospective in nature. On this aspect of the matter, we may usefully refer to the Constitution Bench judgment in the case of Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited [(2015) 1 SCC 1] wherein it was observed as under : A legislation, be it a statutory Act or a statutory rule or a "27. statutory notification, may physically consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work of fiction/non-fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative draf....
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....lear that expenses which have been reimbursed by the principals to the appellant working as a pure agent, cannot be included in the assessable value for charging the service tax. However, we find from the Order-in-Original that though it has been claimed by the appellant but such an exercise has not been done to determine how much amount was actually received as reimbursement of the expenses. As stated in the preceding paragraph, the learned advocate claimed that an amount of Rs. 93,96,803/- was received by the appellant as reimbursement of expenses made on behalf of service recipient on account of depot expenses, weighing machine expenses, empty cartons charges, diesel expenses, house keeping expenses etc. 11. We are of the opinion that expenses which have been received as reimbursement of expenses made on behalf of service recipient by the appellant cannot form part of the assessable value as held by the Supreme Court in Union of India vs. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. The Adjudicating Authority has to verify the claims made by the appellant from the financial and other records and decide the issue as per the principles laid down by the Supreme Co....