Case Law Details
Paper and Allied Conversions Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Introduction: The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Chennai recently adjudicated a case that revolved around whether reimbursable expenses should attract service tax. In its decision on the case of Paper and Allied Conversions vs Commissioner of GST & Central Excise, the tribunal ruled that service tax cannot be imposed on reimbursable expenses. This article provides an in-depth examination of the case.
Background of the Case: Paper and Allied Conversions had undertaken job work which, according to the Department, fell under the category of ‘Business Auxiliary Service.’ Therefore, they were supposed to pay service tax on the reimbursable expenses and job charges they received. The Department found that they did not do so and issued a show cause notice, followed by a demand, which was upheld by the Commissioner (Appeals).
Argument by Paper and Allied Conversions: Represented by Counsel Ms. Manne Veera Niveditha, the appellant referred to the Hon’ble Apex Court’s decision in the case of Union of India Vs Intercontinental Consultants and Technocrats Pvt. Ltd. The appellant argued that, as per this ruling, the demand for service tax on reimbursable expenses could not sustain.
Revenue’s Stance: Ld. A.R Sri Harendra Singh Pal appeared for the Revenue and supported the demand for service tax on reimbursable expenses. He argued in favor of upholding the impugned order.
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