2023 (6) TMI 148

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....s wherein Service Tax has been demanded under the category of "Business Auxiliary Service". 2. The facts of the case are that the appellant is engaged in manufacturing of Indian Made Foreign Liquor (IMFL), from its plant located at Itanagar, Arunanchal Pradesh. The Appellant has entered into agreement with United Sprits Ltd. (USL), the Brand Owner (BO) as Contract Bottling Unit (CBU) to manufacture IMFL with its Brand name. Due to State Excise Regulation, it is a common practice in the industry that the Appellant has appointed a CBU to manufacture IMFL in CBU's factory and CBU's License with the brand belonging to the Brand Owner. The necessary raw/packing material is procured by the CBU in accordance with the instructions of the Brand Own....

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....ices to the Brand Owner. For his services, the CBU is entitled to an agreed retention amount on which the CBU discharges Service Tax. All other income and expenses are in fact to the account of the Brand Owner, though in order to meet State Excise regulatory compliance, the same may be accounted as CBU's income and expenses. 7. Separately, the Brand Owner for providing his technology, brand, etc to the CBU for the manufacture of IMFL, charges CBU a certain amount under the Usership Agreement. The Brand Owner has paid Service Tax on the said amount being received from the CBU under the Usership Agreement. The Revenue issued two separate Show Cause Notices first for the period 23/09/2009 to 30th June 2012 on 14/09/2014 and second for April 2....

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....mber 2009 is that there should be documentary proof specifically indicating the value of these inputs. Therefore, the value of raw material and packing material would be exempted only when such charges specifically mentioned in the invoices raised and documents maintained by CBUs being the nature of cost of raw material and packing materials are not chargeable to Service Tax. He further submits that as per the said Circular, Service Tax was payable of job charges and other reimbursable. He submits that on reimbursable expenses, the appellant was not liable to pay Service Tax as held by the Hon'ble Supreme Court in the case of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. reported in 2018 (10) G.S.T.L. 401 (S.C.).....

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....Pvt. Ltd. (Supra). In the Appeal No. ST/75951/2021, the said decision is not applicable. He further fairly agreed that the Show Cause Notice dated 20th October 2020 was issued after invoking the extended period of limitation. 12. Heard the Parties and Considered their submissions. (i) Appeal No. ST/75793/2015 :- 13. As the issue involved in this matter has been settled by the decision of the Hon'ble Apex Court in the case of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. (Supra) wherein it has been held that reimbursable expenses are not to be included in valuation of taxable service therefore, we hold that in Appeal No. ST/75983/2015, the reimbursable expenses cannot be includble in the assessable value of ta....