TaxTMI 
TaxTMI 
2021 (10) TMI 588
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....llows:- "(i) I confirm the demand of Service Tax of Rs. 11,46,11,071/- inclusive of Education cess and SHE cess, being the Service Tax short paid by M/s KCPL Computershare Pvt. Ltd. on the value of Business Auxiliary Services, Share Transfer Agent services and Registrar to an Issue services rendered by them during the period 10.09.2004 to 31.01.2007 under Section 73 (1) of the Finance Act, 1994 readwith the proviso thereto ; (ii) The amount of Rs. 2,16,65,028/- already paid by M/s KCPL is appropriated towards the demand at (i) supra ; (iii) I drop the demand of Service Tax of Rs. 3,38,371/- on the value of "Intellectual Property services" received by them from foreign service providers on the basis of discussion supra ; (iv) I confirm the demand of Rs. 2,94,640/-, including Education cess and SHE cess, being the Service Tax not paid by M/s KCPL on the value of Manpower Recruitment or Supply agency services received by them from foreign service provider under Section 73 (1) of the Finance Act, 1994 readwith the proviso thereto ; (v) I confirm the demand for interest under Section 75 of the Finance Act, 1994, at the applicable rates on the demand of Service Tax made at (i) ....
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....o on limitation there is no justification in the impugned order. The same is liable to be set aside. Hence, we allow the appeal with consequential relief". 4. Thus, for the period prior to 10.9.2004, the issue has been decided. On 10.09.2004, the definition of 'Business Auxiliary Services' under Section 65 (19) of the Finance Act, which is a taxable service, was enlarged and a new clause "(vi) provision of service on behalf of the client;" was also included. The case of the Revenue in this case is that the services provided by the appellant from 10.9.2004 were taxable under the revised head of Business Auxiliary Services. The definition of Business Auxiliary Services prior to 10.09.2004 and after this date are as follows :- Definition of "Business Auxiliary Service" (BAS) For the period from July 1, 2003 to September 9, 2004 Business Auxiliary service means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) any incidental or auxiliary support service such....
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....rvices; or (ii) Collects payment of sale price of such goods or services; or (iii) Guarantees for collection or payment for such goods or services ; or (iv) Undertakes any activities relating to such sale or purchase of such goods or services; (amended definition effective from 16.06.2005) (b) "information technology service" means (i) any service in relation to designing, or developing or maintaining of computer software or computerized data processing or system networking, or any other service primarily in relation to operation of computer system; Prior to 01.05.2006 ; (ii) any service in relation to designing, or developing of computer software, or system networking, or any other service primarily in relation to operation of computer systems From 01.05.2006 till 15.05.2008". 5. Thereafter, from 1 May, 2006 any service provided or to be provided to any person for a share transfer agent in relation to securities was also included as a taxable service. Similarly, from 1 May, 2006 any service provided or to be provided to any person by a Registrar to issue in relation to sale or purchase of securities was also included as a taxable service. 6. For the period 10.9.2004 ....
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....the head of Business Auxiliary Services for the period 10.09.2004 to 30.04.2006, including on all reimbursable expenses. They also concluded that the appellant was liable to pay service tax under 'share transfer agency' service and 'registrar to issue' services for the period from 01 May 2006 including on all reimbursable expenses. The appellant had, during investigation clarified by letter dated 08.05.2008 that it had charged service tax on reimbursable of expenses, except postage expenses from December 2006 and on all reimbursable expenses including the postage from February 2007. The CFO of the appellant sent a letter dated 11.05.2007 submitting that it had issued debit notes whereby the service tax was charged from the clients on all reimbursable expenses on actual basis and paid the same to the Department. It was also mentioned the service tax on reimbursable expenses for the period prior to 1 May 2006 was not paid as the demand itself under the head of Business Auxiliary Services was not sustainable. 10. Not agreeing with the contention of the appellant, the Additional Director General (DGCEI), issued the show cause notice dated 12.10.2009 demanding service tax of Rs. 11,46,....
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.... Agent' Service and 'Registrar to Issue' Service on the service charges collected by the appellant. (iii) For some period, it had paid service tax even on the reimbursable expenses paid by clients and has collected such service tax from clients, although it is now a well settled legal position by Inter-Continental Consultants [Union of India versus Intercontinental Consultants and Techno Craft Pvt. Ltd. - 2018 (10) G.S.T.L. 401 (S.C.) ] decision of the Supreme Court that no service tax is payable on reimbursable expenses. Nevertheless, to buy peace, it had paid service tax on all reimbursable expenses collected from clients after 1.5.2006 and also collected such service tax from clients by issuing debit notes. It does not intend to claim any refund as it has collected the service tax from its clients. (iv) It also paid interest on the service tax on reimbursable expenses and collected the same from clients for issue of debit notes. (v) Notwithstanding the above, learned Counsel submits that no service tax is payable on reimbursable expenses as held by the Supreme Court in Intercontinental Consultants. (vi) In this appeal, the appellant is only contesting the demand of....
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....r as the reimbursable expenses recovered by the appellant from its clients for this period is concerned, it has now been settled by the Supreme Court in Intercontinental Consultants, that no service tax can be levied on reimbursable expenses recovered by a service provider. The service tax has to be levied only for consideration received for service. The relevant paragraphs of this judgment are reproduced below :- "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 gross amount charged for providing 'such' taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service cannot a part of that valuation as that amount is not calculated for providing such 'taxable service'. That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasised that Rule 5 of the Rules went much beyond the mandate of....
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....iffers in its provenance, layout and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit : law looks forward not backward. As was observed in Phillips v. Eyre [(1870) LR 6 QB 1] , a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with futu....
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....e is no dispute regarding the fact that the appellants are engaged in the services of share transfer agent and registrar official. They first brought into service tax net only w.e.f. 1-5-2006. The Tribunal in the case of Ankit Consultancy [2007 (6) S.T.R. 101] cited by the learned Advocate elaborately dealt with this issue and has given a finding that prior to this period it would not come fall within the category of 'Business Auxiliary Services'. Moreover, in the present case the show cause notice it time barred, as the longer period cannot be invoked. In view of the fact, that there was no suppression of fact. Therefore, both on merits and also on limitation there is no justification in the impugned order. The same is liable to be set aside. Hence, we allow the appeal with consequential relief". 20. The current demand is for a subsequent period (10.09.2004 to 30.04.2006) and there was a change in the definition of 'Business Auxiliary Service'. Nevertheless, it has been categorically held by the Tribunal that no service tax can be charged prior to introduction of the heads of 'Share Transfer Agent' Service and 'Registrar to Issue' Service from 1.5.2006. Nevertheless, the appellan....
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....he Department's case in the above issue had also suffered on grounds of limitation of time. Therefore, I beg to differ from the ratio of the Hon'ble CESTAT judgements in this regard and hold that the services rendered by M/s KCPL very much fall under the purview of Business Auxiliary Service from 10.09.2004 onwards". 22. The Commissioner has not stated that the facts are different or the ratio of the Order of CESTAT does not apply. The law has changed but nevertheless all the changes in the law including the imposition of service tax under the head 'Share Transfer Agent' Service and 'Registrar to Issue' service with effect from 1.5.2006 were in place at the time the Final Order was passed by the CESTAT and it was held that prior to this period, no service tax can be charged under the head of BAS. The learned Commissioner said that 'He begs to differ from the ratio of the Hon'ble CESTAT'. Since he differs from CESTAT, he did not follow order of the CESTAT in the appellant's own case on the same issue for an earlier period which is clearly against judicial discipline. As a quasi-judicial authority, he was bound to follow the decision of the Tribunal and could not have taken a differ....
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....e tax confirmed was imposed as penalty on the appellant under section 78 of the Finance Act. We find that this penalty cannot be sustained and needs to be set aside on more than two grounds. section 78 of the Finance Act reads as follows :- "78. Penalty for suppressing value of taxable service. - If the Central Excise Officer in the course of any proceedings under this Chapter is satisfied that any person has, with intent to evade payment of service tax, suppressed or concealed the value of taxable service or has furnished inaccurate value of such taxable service, he may direct that such person shall pay by way of penalty, in addition to service tax and interest, if any, payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of service tax sought to be evaded by reason of suppression or concealment of the value of taxable service or the furnishing of inaccurate value of such taxable service : Provided that if the value of taxable service (as determined by the Central Excise Officer on assessment) in respect of which value has been suppressed or concealed or inaccurate value has been furnished exceeds a sum of twenty-five thousand rupees....