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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
VICE-PRESIDENT, Dr. Chittaranjan Satapathy, MS. JYOTI BALASUNDARAM
Jerry & Co. -Appellant
Versus
Commissioner of Service Tax, Chennai -Respondent
STAY ORDER NO. 468/2010 APPLICATION NO. ST/S/229/2009 APPEAL NO. ST/380/2009
Decided On : 27-09-2010
P.C. Anand,Ms. Indira Sisupal
Ms. Jyoti Balasundaram, Vice-President. - We have heard both sides on the application for waiver of pre-deposit of Service Tax of Rs. 3,36,241 and penalty of Rs. 3,40,000. The demand arises as the result of inclusion of reimbursable expenses in the assessable value.
2. First submission of the learned Counsel for the assessees is that M/s. Jerry & Co., a partnership firm was dissolved and therefore, notice should have been issued to all the partners of the partnership firm and the demand cannot be recovered from only one firm of partner namely M/s. Jerry & Co., the main partner. However, we find that the Commissioner in Order-in-Revision has recorded that the firm was dissolved in December, 2006 and the assets and liabilities of the firm were taken over by A. Joseph Vincent, under sole proprietorship. Therefore, this argument does not find prima facie favour with the Bench. As regards the issue on merits although the learned Counsel submits that out of pocket expenses are eligible for exclusion from the gross amount, the expenses incurred being in the nature towards sales promotion activities, liaison infrastructure facilities etc. cannot prima facie be termed as out of pocket expenses and are essential and integral part of the service provided.
3. In the light of the above discussion, we hold that the assessee has not made out a case for total waiver of pre-deposit and keeping in view the total facts and circumstances of the case, we direct the assessee to deposit an amount of Rs. 1,00,000 (one lakh) within a period of four weeks from today and on such deposit, pre-deposit of the balance amount of Service Tax and penalty shall stand waived and recovery thereof stayed pending the appeal. Failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice.
4. Compliance is to be reported on 22-11-2010.
