2023 (8) TMI 247

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....ring the relevant period from September 2004 to September 2005, the appellant rendered service under the category of 'Banking and Other Financial Services'. They collected P & T charges from their customers but not discharged service tax on the same. Alleging that the said charges are includable in the gross taxable value under Section 67 of the Finance Act, 1994, show cause notices were issued to the appellant for recovery of the service tax not paid on such expenses. On adjudication, demands were confirmed along with interest and penalty. Aggrieved by the said order, the appellant filed appeals before the learned Commissioner (Appeals), who in turn upheld the order of original authority and rejected their appeals. Hence, present appeals. ....

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....expenses also form part of „gross amount charged‟. Therefore, the core issue is as to whether Section 67 of the Act permits the subordinate legislation to be enacted in the said manner, as done by 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 whic....

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....bdquo;for such service‟ and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25. ----- 26. ---- 27. ---- 28. ---- 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 providi....