Broekman Logistics (India) Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The appeal arose from an Order-in-Appeal dated 10.08.2015 passed by the Commissioner of Service Tax (Appeals-II), Chennai. The appellant, engaged in providing Clearing and Forwarding Agency Service, Cargo Handling Service, Business Auxiliary Service, and Goods Transport Agency (GTA) Service, challenged the confirmation of service tax demands aggregating to Rs. 71,925 along with penalty under Section 76 of the Finance Act, 1994.
The dispute involved three issues: (i) service tax on reimbursable expenses amounting to Rs. 36,181 for the period December 2008 to December 2009; (ii) service tax of Rs. 9,437 under reverse charge mechanism on alleged GTA services for the period April 2009 to December 2009; and (iii) a demand of Rs. 26,307 relating to services provided to SEZ units during April 2009 to December 2009.
Regarding reimbursable expenses, the appellant argued that amounts recovered towards Terminal Handling Charges, CFS charges, Delivery Order charges, demurrage, and similar expenses were incurred on behalf of customers and recovered on an actual basis. Relying on the Supreme Court’s decision in Union of India v. Intercontinental Consultants and Technocrats Pvt. Ltd., the appellant contended that, prior to 14.05.2015, reimbursable expenses were not includible in the taxable value of services. The Revenue maintained that exclusion of such expenses was permissible only if the conditions applicable to a pure agent were satisfied.
