No service tax on amount received by service receiver towards reimbursement of expenses - Intercontinental Consultants relied upon.

Sercon India Pvt. Ltd vs. Commissioner (Adjudication) Service Tax [2013 (30) S.T.R. 454 (Delhi)]

Facts:

The revenue imposed service tax on the reimbursed expenses of Rs. 37 crore received by the petitioners against which the CESTAT granted partial relief to the petitioner with regard to amount of pre-deposit. The petitioner filed a writ petition before the High Court for waiver of deposit of the balance amount and submitted before the Hon'ble Court that, he had only

received a sum of Rs.14.22 crore by way of reimbursement for expenses incurred by it. The petitioner further referred to Intercontinental Consultants & Technocrats Pvt. Ltd. vs. Union of India 2013 (29) S.T.R. 9 (Del) wherein Rule S(1) relating to reimbursement of expenses was held to be ultra- vires the provisions of section 67 of the Act.

Held:

Referring to International Technocrats Pvt. Ltd. (supra), it was held that the amount of Rs. 14.22 Crores actually received by the petitioner towards reimbursement of expenses could not be a subject matter ofservice tax and the petition was allowed.