COMMISSIONER OF SERVICE TAX Vs. SANGAMITRA SERVICES AGENCY

JUDGEMENT

(1.) The Revenue is on appeal as against the order of the Customs, Excise and Service Tax Appellate Tribunal passed in No. 902 of 2007 dated July 24, 2007 Sangamitra Services Agency v. CCE, Chennai,2007 9 VST 590 raising the following substantial question of law:

(2.) The Customs, Excise and Service Tax Appellate Tribunal, as a matter of fact found in this case that various charges, which were alleged by the Revenue, to be includible in the taxable value of carrying and forwarding service were reimbursed by the principals on the basis of actuals. Those amounts received by the assessee from the principals as remuneration/commission for service of clearing and forwarding the goods has been rightly assessed as taxable value and tax paid.

(3.) It is seen from the documents placed before this court that the show cause notice pointed out that the various charges received by the assessee from the principal towards freight, labour, electricity, telephone, etc., were required to be added to the value of the taxable service in relation to the services provided by a clearing and forwarding agent of the principal. The assessee contended that as per rule 6(8) of the Service Tax Rules 1994, only on the gross amount of remuneration or commission would be paid to them by their principals for the service of clearing and forwarding; since the expenses were incurred by the assessee and reimbursed to them by their principals for the service of clearing and forwarding of excisable goods, the same could not enter into the taxable value under rule 6(8) of the Service Tax Rules, 1994 read with 67 of the Finance Act, 1994. The assessee further contended that the inclusion of such reimbursed expenditure was bad in law.