TaxTMI 
TaxTMI 
2024 (5) TMI 565
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....ion Fund was being deducted from the bill amount and Service Tax was being charged only on the net amount. Finally, the employees of the Appellant were provided accommodation by RINL. In case of reimbursement of expenses on various counts, the Department took the view that in terms of Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, such reimbursements have to be added to the total consideration for payment of Service Tax. On this count, the Service Tax of Rs.5,18,41,050/- was demanded. In respect of the excess pension contribution claimed, Service Tax of Rs.10,61,476/- was demanded. In respect of the rent free accommodation provided to the Appellant's personnel by RINL, the HRA @20% of the Basic Pay and Grade Pay was taken as the value of the rent saved by the Appellant. This was taken as part of the total consideration in terms of Section 67 of the Finance Act and Service Tax of Rs.70,76,574/- was demanded. After due process, the Adjudicating Authority confirmed the demands. Being aggrieved, the Appellant is before the Tribunal. 2. Learned Counsel appearing on behalf of the Appellant submits that admittedly, the expenses on account of medical services, vehicl....
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....red for the period 01.04.2009 to 31.03.2011 for the following reasons: i) The Appellant is a Registered Service Provider and has been discharging their Service Tax liabilities and was also filing their ST3 Returns. ii) Being under the bonafide belief that reimbursements are not liable to be added to the gross value, the Appellant has not paid the Service Tax. This belief of theirs was fortified by the cited decisions of Hon'ble Supreme Court in the case of Intercontinental Consultants & Technocrats Pvt Ltd (cited supra) and Bhayana Builders (P) Ltd (cited supra). iii) The Appellant is working under the Ministry of Home Affairs and being directly under the Ministry providing service to PSU. Both of them would have no intention to evade Service Tax payable to the Government of India. 7. In view of the above, she submits that no case of suppression can be made out against the Appellant and hence, the confirmed demand for the extended period is not legally sustainable on account of time bar. Accordingly, she prays that the confirmed demand for the period 01.04.2009 to 31.03.2011 may be set aside and Appeal may be allowed on account of time bar also. 8. ....
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....esel and explosives would not warrant inclusion while arriving at the gross amount charged on its Service Tax is to be paid. Therefore, all these appeals are also dismissed." [Emphasis supplied] 11. Similarly, the Hon'ble Supreme Court in the case of Bhayana Builders Pvt Ltd (cited supra), have held that free supplies would not form part of the total value for charging of Service Tax. The relevant portion of the judgment is as under: "16. In fact, the definition of "gross amount charged" given in Explanation (c) to Section 67 only provides for the modes of the payment or book adjustments by which the consideration can be discharged by the service recipient to the service provider. It does not expand the meaning of the term "gross amount charged" to enable the Department to ignore the contract value or the amount actually charged by the service provider to the service recipient for the service rendered. The fact that it is an inclusive definition and may not be exhaustive also does not lead to the conclusion that the contract value can be ignored and the value of free supply goods can be added over and above the contract value to arrive at the value of taxable services. ....
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....provisions of Section 67 of Finance Act, 1994 and therefore, the reimbursable expenses paid to the service provider are not includable in the assessable value. We also note that Hon'ble Supreme Court has upheld the said decision of Hon'ble Delhi High Court and held that Section 67 of Finance Act, 1994 authorizes only such consideration which is received by the service provider for assessment of Service Tax. By following the said ruling of Hon'ble Supreme Court we hold that the impugned order is not sustainable." [Emphasis supplied] b) In the case of CGST, CCE, Dehradun vs Commandant CISF Unit [2019 (2) TMI 1175 - CESTAT New Delhi], it has been held as under: "3. It is submitted on behalf of the Department that the Order-in- Original had specifically appreciated that the cost of accommodation facility as provided by BHEL to CISF (the service provider) but in lieu of HRA which according to Rule 3 of Valuation Rules becomes the such consideration for the service provider i.e. CISF which otherwise not in terms of money. This important finding has absolutely been ignored by Commissioner (Appeals) while passing the Order under challenge. While impressing upon the demand to be....
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.... In the case of CISF vs CST-I, Pune [2021 (11) TMI 835 - CESTAT Mumbai], it has been held as under: "2.2 The appellant was providing security agency services to M/s. Infosys Ltd., Pune from July 2010. They were determining the assessable value on the amount charged by them from the service recipient. However, the appellant was receiving certain facilities like accommodation, medical facility, vehicle, telephone, stationery etc. and has not included the value of these facilities while determining the taxable value for payment of service tax in respect of the services rendered by them. . . 4.2 We find that the issue is squarely covered in favour of the appellant by various decisions referred to by the appellant. Taking note of all the said decisions, the Tribunal in the case of Bharat Coking Coal Ltd. [2021-TIOL-551-CESTAT-KOL]:- "We find that the Allahabad Bench of the Tribunal in the case of Central Industrial Security Force v Commissioner of Customs, C.E. & S.T., Allahabad, Appeal No. ST/70293/2016- CU [DB] decided on 9th January, 2019 = 2019-TIOL-3277- CESTAT-ALL, has already settled the issue in favour of the appellant to hold that ex....