Service tax on invoice raised directly on a third party.

Dear Sir,
I am working as head of North India for a reputed freight forwarding company in Delhi.
Recently our service was used by another forwarder for movment of household goods to the U.S of a U.S national working for the U.S embassy who provided us with a SERVICE TAX EXEMPTION CERTIFICATE and as such we were asked by the forwarder who was raising the invoice on the U.S embassy for his own service plus our invoice ( which we are asked to raise directly in the name of the U.S embassy) not to charge service tax.
This was on account of the fact that our invoice was being used by the billing party purely as an invoice for reimbursement.
My question is can I raise an invoice directly on the U.S embassy and receive payment from the billing forwarder who would be deducting TDS.
My CFO argument is that we have to recover full service tax from the fwdr as he would not be a debtors in my books as the invoice is in the name of the U.S embassy and therefore the credit for TDS cannot be availed.
I am completley confused with this logic because i believe that since the direct receipient of the service is exempted from service tax we should not be charging service tax from the billing forwarder who is using my invoice purely as a reimbursement invoice and as per the new ruling of INCOME TAX, he is bound to deduct TDS on reimbursement too u/s 194.
Please advise as other fwdrs have not charged SERVICE TAX for previous shipments handled by them for the same shipments.
The FWDR will not pay service tax on my invoice.
Amit bhaduri