K. Anpazhakan DECISION
Ashok Jindal, Member (J)
1. The appellant is in appeal against the impugned order wherein the demand of service tax has been raised on account of non-inclusion on reimbursable expenses incurred by the appellant in taxable services.
2. The facts of the case are that the Service Tax Audit was initiated for the period 2015-16 to 2017-18 (upto June 2017) by the Department against the appellant. A letter was issued for submissions of the documents. The appellant supplied the documents and it was observed that the appellant has obtained the Service Tax Registration under Section 65 (105)(h) of the Act. In the balance sheet and trading/profit and loss account for the relevant period, they have declared the gross amount charged to their clients an amount of Rs.21,74,65,342/- and an amount of Rs.20,71,78,011/- as reimbursable expenses. However, the appellant has declared taxable value as Rs.3,13,96,519/-.
2.1. The case of the Revenue is that the appellant has incurred expenses showing reimbursable expenses but the tax was paid on some charges taking into consideration the same as taxable value for CHA services.
2.2. On the said basis, a show-cause notice was issued to the appellant to demand differential service tax for payment of service tax on reimbursable expenses claimed by the appellant.
2.3. The matter was adjudicated. The demand of service tax was confirmed.
2.4. Against the said order, the appellant is before us.
3. The ld.Counsel for the appellant submits that the appellant was registered as service provider for clearing and forwarding agent services under Section 65 (105)(j) read with Section 65 (25) of the Finance Act, 1994. It is his submission that the appellant is providing the pure agency services and to that effect, the appellant provided various agreements with their Principal showing that the appellant is only a pure agent. It is the submission that the appellant has provided services, namely, freight charges, loading and un-loading etc. on behalf of their Principal on actual basis as the appellant was acting as pure agent, therefore, the said amount cannot be included in their taxable services. It is submitted that the reimbursable expenses cannot be included in the taxable services as held by this Tribunal in the case of Principal Commissioner of Central Excise & Service Tax, Patna Vs. M/s Ganga Carrier Private Limited vide Final Order No.76626/2023 dated 11.09.2023.
4. On the other hand, the ld.A.R. for the Revenue, reiterated the impugned order.
5. Heard both the parties and considered the submissions.
6. We find that the appellant has claim that they are the pure agents. In support of their claim, the appellant has filed various agreement with their Principal, which shows that the appellant is the pure agent and all the expenses of Principal are for taking and delivery of the goods, for making payment for transportation, freight of clearing and forwarding services for the purposes of agency. All the charges paid are to be reimbursed to the appellant on actual basis as the appellant is a pure agent. For better appreciation, one of such agreement is extracted here :
7. On going through the agreement itself, we find that the appellant is only pure agent and all the expenses for transportation, loading and un-loading etc. paid by the appellant were reimbursed from the Principal on actual basis. In that circumstances, the appellant is not required to include the reimbursable expenses in their taxable services.
8. Moreover, the present issue whether the reimbursable expenses are includable in the taxable value or not, has been examined by this Tribunal in the case of M/s Gang........