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Service Tax Case Law - Appellant discharged service tax liability.
Service Tax – appellant discharged service tax liability as per the remuneration agreed upon in the contract – demand of service tax on remittances received from the client for reimbursement of various other expenses incurred by the appellant on behalf of the client – demand also in respect of deputation of employees of the appellant for carrying out the business activities of the client was also liable to tax under 'manpower recruitment or supply service' on the salaries and other expenses reimbursed by the client
HELD – in terms of the decision of the Hon’ble Supreme Court in Intercontinental Consultants case, the legislative intent to tax was held to be limited to the consideration for the service and the test of leviability for the taxable service would have to be overcome for bearing fruit - The obvious conclusion, therefore, is that the consideration agreed upon as recompense for a particular service is taxable.
Any other receipt has to be evidenced as additional consideration for the said service to be subject to tax - no convincing argument on this score in the notice or the impugned order. In view of the decision of the Hon'ble Supreme Court, it is held that the demand of tax under the head of BAS should be restricted to such amount as was being discharged by the appellant on the contracted amount - the impugned order is set aside and appeal is allowed.