P.G. Chacko, Member (J)

1. The lower authorities have demanded service tax of over Rs. 28 lakhs from the appellants (a Customs House Agent) for the period from October 1999 to March 2004. They have also demanded interest on tax and have also imposed penalties. After examining the records and hearing both sides, we find that the above demand of service tax is on the gross amount collected by the appellants by way of reimbursement of expenses from their clients during the above period. The learned Counsel for the appellants has relied on the Boards Circular No. 43/1/97-TRU dated 6-6-1997 as also on a few decisions of this Tribunal, in support of his argument that service tax was payable only on the service charges recovered by the CHA from their clients and the same was not payable on the reimbursements. We have heard the learned SDR also, who has submitted that the appellants collected large amounts in excess of actual expenses, from their clients and that such excess amounts were not exempted from payment of service tax. According to the learned SDR, these excess amounts were addable to the service charges to arrive at the taxable value under Section 67 of the Finance Act, 1994. It is pointed out that the balance sheets of the CHA for the relevant period would make the above factual position clear. We have not found these documents on record. Going by the circular of the Board and the decisions cited by the learned Counsel [Bax Global India Ltd. v. Commissioner of Service Tax, Bangalore etc.], we have found prima facie case for the appellants against the impugned demand. Accordingly, there will be waiver of pre-deposit and stay of recovery in respect of the tax, interest and the penalty amounts. It is up to the SDR to bring on record documentary evidence to substantiate the Revenues case that large amounts in excess of actual expenses were collected by the CHA from their clients during the material period and that these amounts would form part of taxable value under Section 67 ibid. This case of the Revenue will be considered at the final hearing stage.

(Dictated and pronounced in open Court)