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May 2015

[2015-TIOL-538-CESTAT-MUM] Kirloskar Pneumatic Co. Ltd vs. Commissioner of Central Excise, Pune-III.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Reimbursable expenditure shall not form part of the value of the taxable service.

Facts:
Employees of Appellant incurred travel expenses while providing output service. Invoices issued separately indicated service charges and actual charges for travelling and due service tax was discharged on the service charges. Show Cause Notices were issued demanding service tax on the travelling expenses on the ground that as per section 67 of the Finance Act, 1994, gross amount which is charged for rendering of services which includes travelling expenses should be the value for the purpose of service tax.

Held:
Relying on the decision of the co-ordinate bench of the Tribunal in the case of Reliance Industries Ltd. vs. Commissioner of Central Excises, Rajkot [2008-TIOL- 1106-CESTAT-AHM] which is upheld by the apex Court held that the reimbursable expenditure shall not form part of the value of the taxable service.

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