2024-VIL-507-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax – Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 – Taxability of Reimbursement expenses – Appellant have been providing security services to Rashtriya Ispat Nigam Ltd (RINL) and were paying Service Tax towards consideration received from RINL for security services – Appellants were also receiving reimbursements on account of various expenditures from RINL – Department viewed that in terms of Rule 5(1) of the Rules, such reimbursements have to be added to total consideration for payment of Service Tax – On this count, Service Tax was demanded – Adjudicating Authority confirmed demands – Whether reimbursement expenses are liable to be added to gross value for arriving at Service Tax payable by Appellant – HELD – Appellant have been receiving reimbursements for various expenses like medical expenses, stationery expenses, transportation costs, etc., from RINL – Issue is squarely covered in favour of Appellant by various decisions referred to by Appellant to effect that expenses incurred towards medical services, vehicles, expenditure on Dog Squad, stationery expenses, telephone charges, expenditure incurred by service recipient for accommodation provided to CISF etc are not includible in taxable value – Reimbursement expenses are not to be added to gross value for arriving at Service Tax payable – Appellant is a reputed Government of India Undertaking working under Ministry of Home Affairs and they cannot be said to have any intention to evade Service Tax payment – Confirmed demand is legally not sustainable on account of time bar also – Appeal allowed
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