Recovery of FBT as part of total cost in the bill?

Hi everyone,

My client is a callcenter & paying FBT on expenditure of Telephone expenses as bill is coming on his name.But he is saying that such expenditure is on behalf of his client/customer because customer has installed telephone lines at his office

My client is taking the benefit of input credit of such expenditure for service tax purposes.

now he is making his bill on his client like below:

Telephone expense                                       112000

less : Reversal ofService tax (say)              12000

balance                                                            100000

FBT ( say 6.798%)                                          6798

 total                                                                  106798

Service tax @ 12.36%                                     13200

 Total bill amount                                           119998

My client is showing this much of amount as reimbursement of telephone expenses in the bill

Can any tell me is this correct ? As nothing mentioned anywhere about reimbursement of FBT  . And my client is charging service tax on FBT saying that it is part of his total cost .

Is there penalty for this anywhere?