CESTAT, CHENNAI BENCH
Commissioner of Service Tax, Chennai
Final Order Nos. 277 & 278 OF 2012
Appeal Nos. ST/768 OF 2010 & ST/166 OF 2012
March 20, 2012
S.S. Kang, Vice-President – Heard both sides.
2. Common issue is involved in these appeals hence are being taken up together.
3. Appellants filed these appeals against the impugned orders passed by the Commissioner of Service tax. The appellants are Customs House Agents (CHA) and being a provider of CHA service, the appellants are liable to pay service on the gross amount received for discharging of their CHA service. In the present case, the dispute is in respect of CMC charges, which are levied by the computer centre for filing the bill of entry and shipping bills electronically. The Revenue added the CMC charges to the assessable value of the CHA service provided by the appellants.
3(a) The contention of the appellants is that CMC charges are not includible in the assessable value as the same are separately charged from the customer on actual basis. It is also submitted that CMC charges are not part of the CHA service. The appellants also submitted that the demand is time-barred as the appellants were under the bona fide belief that as the CMC charges are separately reimbursed by their customer and hence are not part of the assessable value of the service provider. As such, there is no intention to evade payment of duty on the part of the appellants. It is also submitted that the CMC has already collected the service tax in respect of the CMC service. Therefore, the demand from the appellants by including in the assessable value of the appellants amounts to double taxation.
4. The contention of the Revenue is that according to the provisions of rule 5(1) of Service Tax (Determination of Value) Rules, 2006 “where any expenditure or cost are incurred by the service provider in the course of providing taxable service all such expenditure or cost shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax on the said service”. In view of the provisions of rule 5 of the said Rules, the CMC charges are to be included in the assessable value of the service for the purpose of service tax.
5. In respect of time bar, the contention is that the appellants never disclosed to the Revenue that they were charging the CMC charges from their customers separately, though there was a column in ST-3 return, which requires the disclosure in respect of reimbursable expenses. Hence, the demand of service tax is justified.
6. We find that issue involved in the appeal is whether the CMC charges are to be included in the assessable value of taxable service of a CHA. Admittedly, the appellants are liable to pay service tax as provider of CHA service. As per the provisions of rule 5(1) of the said Rules “any expenditure or cost that are incurred by the service provider in the course of providing taxable service are to be included in the value of the taxable service for the purpose of charging service tax”. In the present case, the expenditure in respect of CMC charges is incurred by the appellants in discharging their primary responsibility as a CHA. In view of the clear provisions of rule 5 of the Valuation Rules, the CMC charges are to be included in the assessable value of the taxable service provided by the appellants. As regards the issue of time bar, we find that the appellants never disclosed the fact that CMC charges are recovered from their customers in the ST-3 returns in which the statutory returns are filed by the assessee, wherein there is a separate column in which the assessees have to show the reimbursable expenses. As in the present case, we find that the CMC charges were not shown ill the ST-3 returns. Therefore, we find no merit in the contention of the appellants in respect of time bar also.
In view of the above, the appeals are dismissed.