TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 500
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....ipals, in addition to the charges collected by them for rendering of the CHA service. The Respondent considered these 'reimbursable expenses' as not part of the assessable value and had not paid service tax on these 'reimbursable expenses' recovered from the clients. Accordingly, the Show Cause Notice came to be issued demanding service tax on the reimbursable expenses collected by the Respondent. The Notice also demanded service tax on the difference between the amounts recorded in the Profit & Loss Account and ST-3 Return. 2.1. In the impugned order, the Ld. Commissioner has examined the agreements and the invoices raised by the appellant and concluded that the Respondent fulfilled all the conditions stipulated under Explanation-1 of 'Pure Agent'. The Ld. adjudicating authority has relied upon Board Circular No.119/13/2009-ST dated 21.12.2009 and the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise and Customs, Rajkot v. Reliance Industries Ltd. [2011 (23) S.T.R. J226 (S.C.)] and held that reimbursable expenses are not includable in the assessable value for the purpose of computation of their service tax liability. Accor....
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....ng authority demanded service tax of Rs.1,33,823/-, along with interest, which has been accepted by the Respondent. 3.2. The Revenue contended that the ld. adjudicating authority has not examined whether all those 'reimbursable expenses' received by the Respondent can be considered as receipts under the category of 'pure agents'. Accordingly, it is submitted that the dropping of the demand by the ld. adjudicating authority on this count was not proper. 3.3. Regarding dropping of the demand of service tax of Rs. 7,35,354/-, which has been demanded in the Notice on the difference between the amounts recorded in the Profit & Loss Account and the ST-3 return, there is no specific ground urged by Revenue in the grounds of appeal. 4. The Ld. Advocate appearing on behalf of the Respondent submits that they have specific agreements with 56 clients and collected the 'reimbursable expenses' as 'Pure Agents'. The ld. adjudicating authority has verified the agreements and satisfied himself that the Respondent fulfilled all the conditions of 'Pure Agent' as mentioned in the Board Circular No.119/13/2009-ST dated 21.12.2009 and accordingly dropped the demand; t....
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.... 21.12.2009 and accordingly dropped the demand. We observe that the Chartered Accountant has issued a certificate stating that the Respondent has rendered the CHA service and collected the charges of 'reimbursable expenses' as 'Pure Agents'. The ld. adjudicating authority has relied upon the Chartered Accountant's Certificate and came to the conclusion that the Respondent is not liable to pay service tax on the reimbursable expenses demanded by the Notice. 7.2. In their grounds of appeal, the Revenue contended that there is no indication in the Order-in- Original that the ld. adjudicating authority has cross-verified the Chartered Accountant's Certificate with primary documents such as bills, invoices and other relevant records. We do not agree with the submission of Revenue in this regard. The Chartered Accountant is a professional who issued the certificate after verifying all primary documents. The Department has not produced any evidence to substantiate the allegation that the certificate was issued without verifying the documents. Thus, we observe that there is no reason to doubt the genuineness of the certificate issued by the Chartered Accountant. Accordingly, we ho....
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....alculated for providing such 'taxable service'. That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasised that Rule 5 of the Rules went much beyond the mandate of Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider 'for such service' and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25. This position did not change even in the amended Section 67 which was inserted on May 1, 2006. Subsection (4) of Section 67 empowers the rule making authority to lay down the manner in which value of taxable service is to be determined. However, Section 67(4) is expressly made subject to the provisions of sub-section (1). Mandate of sub-section (1) of Section 67 is manifest, as noted above, viz., the service tax is to be paid only on ....