TaxTMI 
TaxTMI 
2023 (9) TMI 1284
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....mbursable expenditure and (iv) Rs.86,13,978/- towards non-inclusion of parking charges in the value of taxable services. Another SCN dated 04.11.2013 was also issued on the similar grounds for the period 2012 to 2013. Both these SCNs were adjudicated on contest by the concerned Adjudicating Authorities vide OIO dated 24.09.2013 & OIO dated 20.03.2015, respectively. 2. Since the issue is common in both the Appeals (SCNs), even though the Adjudicating Authorities have taken different stand, in so far as confirming the demands, the Appeals filed by the Appellant/Assessee against both the impugned orders are taken up for Hearing together. The issue involved in both the Appeals is whether the service tax is payable on reimbursable expenses viz., amounts collected towards provision of water, electricity, diesel and parking charges under the category of 'Management, Maintenance or Repair services', in the given facts of the case or otherwise. The stand of the Revenue in both the Appeals has been that the Appellants were found to have not included the charges incurred on water, electricity, diesel and parking in the taxable value of services provided under the head - Management, Maintenan....
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....reimburse the amounts paid by the LTIL towards Diesel consumption charges on or before 10th of succeeding month. iii) Section 3: Maintenance charges & Parking 3.2. Parking Charges: (a) Occupant shall pay parking charges as follows. * At the rate of Rs.2000/- per slot per month for a covered 4 wheeler parking * At the rate of Rs.400/- per slot per month for an uncovered 4 wheeler parking * At the rate of Rs.100/- per slot per month for a covered 2 wheeler parking * At the rate of Rs.50/- per slot per month for an uncovered 2 wheeler parking (b) LTIL shall allot parking slots to the Occupant in proportion to the space occupied by such occupant in the building. (c) Occupant shall pay to LTIL an upfront parking deposit amounting to the parking charges for each slot for three months. None of the above charges collected by them is included in the value of the taxable services in respect of services rendered in respect of Management or maintenance service." 4. Therefore, relying on the provisions under Sec 67(3) which provides for inclusion of any amount received towards taxable service and also in terms of Rule 5(1) of Service Tax (Determination of Value) ....
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....tionate distribution of charges, he came to the conclusion that Appellants have acted as 'pure agent' as defined under Rule 5(2) and hence, consideration received on this account was liable for exclusion from the value of taxable services. Similarly, in the case of water charges, he came to the same conclusion that it shall not form part of the taxable value. In fact, such charges collected by the Appellants in the course of provision of service are totally independent of the Maintenance or Repair service. He observed that in respect of electricity consumed for common use at lifts and lights in common areas, the assessee is already paying service tax and those charges were not part of the present proceedings. 7. In so far as the amount collected towards diesel charges is concerned, the Adjudicating Authority felt that these could not be considered as reimbursable expenses under the category of 'pure agent' as they are not transferring such amount to any other person or agency on actual basis. Therefore, this activity does not get covered under exemption clause of Rule 5(2) of Service Tax Valuation Rules, 2006 and held that this amount is liable for service tax under the category o....
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....urred by the Appellant, and there is no profit element involved and the Department has not been able to contradict these facts, therefore, having regard to the judgment of the Hon'ble Supreme Court, the Tribunal held that the Appellant cannot be saddled with the liability on such expenses and therefore, demand cannot be sustained. 10. On the other hand, the Department has relied on certain judgments of the Tribunal, especially, Modern Business Solutions vs CST, Ahmedabad [2019 (24) GSTL 353 (Tri-Ahm)] where the Tribunal has, inter alia, observed that while in terms of decision of Hon'ble Supreme Court in the case of Intercontinental Consultants & Technocrats Ltd (supra), reimbursements cannot be included in the assessable value, however, what constitutes reimbursements has to be determined in the light of Larger Bench in the case of Sri Bhagavathy Traders vs CCE, Cochin [2011 (24) STR 290 (Tri-LB)]. Therefore, the Department appears to dispute that in the instant case it is not in the nature of reimbursement relying on this judgment as well as Tribunal's judgment in the case of Saurashtra Kutch Stock Exchange Ltd vs CCE & ST, Rajkot [2019 (26) GSTL 50 (Tri-Ahm)] and Tribunal's Fin....
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....ra), wherein the reliance has also been placed on Hon'ble Supreme Court's judgment in the case of Intercontinental Consultants & Technocrats Ltd (supra), as also factual matrix brought out in the SCNs as well as in the OIOs, the amount collected towards water, electricity and diesel are in the nature of reimbursable expenses and therefore, not liable for inclusion in the taxable value towards provision of Management, Maintenance or Repair services by the Appellant. There is nothing in the SCNs or impugned orders, which states that they have been collecting anything over and above the amount incurred towards payment of electricity bill and water bill or diesel consumption or that there was any profit involved therein. When they were only collecting actual charges, those will be nothing else, but only collection of amount on reimbursement basis. The fact that the reimbursable expenses, have been specifically brought under the coverage of gross value w.e.f. 14.05.2015, further supports the Appellant's argument that the amounts collected on reimbursable basis were not liable for inclusion before that. In fact they have stated that in their own case itself for the subsequent period, Com....