TaxTMI 
TaxTMI 
2019 (8) TMI 212
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....s, Packing Manpower Expenses, Packing Material Charges, Postage & Courier Charges, Printing Stationery Charges, Repair & Maintenance, Telephone Charges. However, on these charges the appellant did not discharge the service tax. The case of the department is that the above services are required for performing the service of "Clearing and Forwarding Agent Service", therefore, charges received as reimbursement on the above expenses shall from part of gross value of 'CFA' services and is liable for service tax. There is also demand on franchisee service under Section 65 (105) (zze) Finance Act, 1994. 2. Sh. Bishan R. Shah, Ld. CA appearing on behalf of the appellant submits that all the expenses are on actual basis. These are expenses incurred on behalf of the principal client and the same is reimbursed, therefore, and these charges are not part of their activity as Clearing and forwarding agent service. The remuneration towards the 'CFA' service is clearly indicated in each contract with the service recipient, only such remuneration which is representing the service charges towards 'CFA' service is liable to the tax under heard of 'CFA' service, therefore, the reimbursement of expe....
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....lause related to payment in the agreement between the appellant and M/s. Tilda Riceland Pvt. Ltd. is reproduced below:- 6. Remuneration: "The Company is consideration for the service rendered under this agreement shall reimbursed the actual expenditure incurred by 'CFA' as per Annexure-A" 5. From the above agreement it is seen that there is a separate charges for the service of 'CFA' and there are additional charges towards the various expenses which appellant has to undertake on behalf of their client, therefore, the remuneration for the 'CFA' service is clearly identified all other charges are paid as reimbursable charges by the service recipient. Since, the other expenses are incurred as per the instruction of the service recipient the same is reimbursed on actual basis by the service recipient to the appellant. Therefore, in our view, these charges are over and above the remuneration in respect of 'CFA' service and it is not towards the service of 'CFA' as a reimbursement of expenses. Therefore, it cannot be said that the reimbursable expenses is part of the service charge of 'CFA'. This issue has been considered by the Hon'ble Supreme Court in the judgment....
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....Rule 5. As noted above, prior to April 19, 2006, i.e., in the absence of any such Rule, the valuation was to be done as per the provisions of Section 67 of the Act. 22.Section 66 of the Act is the charging Section which reads as under: "there shall be levy of tax (hereinafter referred to as the service tax) @ 12% of the value of taxable services referred to in sub-clauses of Section 65 and collected in such manner as may be prescribed." 23.Obviously, this Section refers to service tax, i.e., in respect of those services which are taxable and specifically referred to in various subclauses of Section 65. Further, it also specifically mentions that the service tax will be @ 12% of the 'value of taxable services'. Thus, service tax is reference to the value of service. As a necessary corollary, it is the value of the services which are actually rendered, the value whereof is to be ascertained for the purpose of calculating the service tax payable thereupon. 24.In this hue, the expression 'such' occurring in Section 67 of the Act assumes importance. In other words, valuation of taxable services for charging service tax, the authorities are to find what is the ....
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....only for the purpose of carrying out the provisions of the Act and they could not take away what was conferred by the Act or whittle down its effect." 29.In the present case, the aforesaid view gets strengthened from the manner in which the Legislature itself acted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with 'consideration' is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the Learned Counsel for the Department that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 and, therefore, has to be prospective in n....
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....be the basis of every legal rule as was observed in 29. L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later." 30.As a result, we do not find any merit in any of those appeals which are accordingly dismissed. Civil Appeal No. 6865 of 2014, Civil Appeal No. 6864 of 2014, Civil Appeal No. 4975 of 2016, Civil Appeal No. 5130 of 2016 and Civil Appeal Nos. 4536-4537 of 2016 31.In the aforesaid appeals, the issue is as to whether the value of free supplies of diesel and exp....
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....T/221/2009 is only on the issue of reimbursable expenses and Business Auxiliary Service i.e. incentive received from Tata Chemicals and courier service, since, there is a contradiction between the submission made by Ld. Counsel and the finding given in the impugned order, these issues are also needs to be re-considered. 8. Accordingly, we set aside the impugned order and remand the matter to the adjudicating authority for passing afresh order by taking into account our above observation. Appeals are allowed by way of remand to the adjudicating authority. (Order pronounced in the open court on 02.08.2019) ============= Document 1 CS Actual Expenses: 1. Warehouse rent will be paid by the company. Area agreed: 1,500 sq. ft Rent Agreed: Rs 7,500 per month Annexure -A (For Ahmedabad) 2. Salary of one person to the extent of Rs 5,000/- per month will be paid by the company specifically employed by CFA for providing all services to the company's work. 3. Unloading of the trucks when they arrive in the warehouse and loading the trucks for further delivery will be paid by the company at the rate of 60 paise per case subject to the p....