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PJ/Case Laws/2011-12/1477

Inclusion of transportation charges in Assessable value of C&F Agent Service

Case: E.V. MATHAI & CO. Versus COMMISSIONER OF CENTRAL EXCISE, COCHIN
 
Citation: 2003 (157) E.L.T. 101 (Tri. - Bang.)
 
Issue:- Service tax on C & F agents - Whether transportation charges will form part of value of taxable service of C & F when separate contract entered transportation?
 
Refund of service tax – Factor of unjust enrichment required to considered.
 
Brief Facts:- The appellant functions as the C&F agent for M/s. Tata Tea Ltd., and M/s. Consolidated Coffee Ltd., under a contract. Separate contract has been entered into for transportation also. In respect of transportation, the rate fixed is per kilogram of tea transported per carton of jam transported etc., Separate bill is being raised in respect of administration charges, telephone, stationery, postage and courier, month wise. The appellant is charging Service Tax on such bills only.
 
Appellant‘s Contention:- The appellants submitted that these two appeals are interlinked, whereas in Appeal No. ST/7/2002 duty was demanded by the Department on the ground that the appellants are liable to pay the Service tax on transportation charges and other appeal (ST/8/2002) relates to refund claim on the ground service tax has been paid though not leviable. He said that no Service tax is payable on transportation charges in view of the amendment brought out by the legislation on 2-6-98. He said that there is separate agreement for the services rendered by the party with reference to transportation and other charges administration charges and other charges which are liable to Service tax and separate bills have also been issued.
 
Respondent‘s Contention:- Respondent  urged that even if service tax is not leviable on transportation charges being separate bills have been issued, nevertheless the refund claim is subject to the Provisions of Unjust Enrichment which requires to be reconsidered.
 
Reasoning of Judgment:- Tribunal not found any justification for levy of service tax on transportation charges. Accordingly, party is entitled to refund of the said amount.
 
The position with reference to the unjust enrichment may be examined by the adjudicating authority.
 
Decision:- Appeal disposed of accordingly. 

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