TaxTMI 
TaxTMI 
2025 (1) TMI 627
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.... obtaining the Registration. d) Penalty amounting to Rs.100/- (for everyday during which such failure continues but not exceed the amount of Service Tax payable) in terms of Section 76 of the Finance Act, 1994 is imposed for contravention of Section 68 of the Finance Act, 1994. e) Penalty amounting to Rs.1000/- (One Thousand only) in terms of Section 77 of the Finance Act, 1994 is imposed. f) Penalty amounting to Rs.2,27,292/- (Two lakhs twenty seven thousand two hundred ninety two only) in terms of Section 78 of the Finance Act, 1994 is imposed." 2.1 Appellant was working as loading and unloading agent to M/s Simbhaoli Sugar Mills Ltd., Ghaziabad they were not registered with the Department and were not paying the service tax. 2.2 On the of intelligence investigations were initiated against the Appellant and it was observed that the Appellant had not paid service tax of amounting to Rs.24,41,043/- received from the Appellant's clients as the commission as for being C & F Agents. 2.3 Show cause notice dated 13.03.2006 issued to the Appellant asking them as to why:- a) The Service Tax amounting to Rs.2,29,606/- (not paid) during the 2004-....
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....her said that they incur expenses towards marketing in the form of entertainment, postage, telegram, godown rent, printing & stationery, travelling, telephone and freight for which they receive payment from SSML in the form of reimbursement of expenses under a separate contract. They have added that the activity of brand promotion of the liquor of SSML by collecting data regarding market size, customer feedback, devising of sales promotion schemes etc. were not covered within the ambit of C & F Agents and as such no service tax was payable by them. In this regard they have relied upon the CBEC circular No.43/7/97-TRU dated 11.07.1997. They have also relied upon the and the decision of Hon'ble Tribunal in case of E.V. Mathai & Co. stating since the services were rendered under different contract they were not liable for service tax on loading and unloading. 10. The adjudicating authority has also relied upon the Board's circular No.B-43/7/97-TRU dated 11.07.1997 wherein it has been provided that a C & F Agent undertakes activities namely- (a) receives the goods from principal or his agent (b) warehouses these goods (c) receives dispatch orders fro....
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....odowns, raising of invoices on behalf of the principal, other clerical jobs at godowns. It is also evident from the contracts that they have an agreement for making an agreed quantity of sale from the godowns but this agreement has not been disclosed to the Department. It is further evident from the contracts between the appellant and SSML that the charges in the name of reimbursement of expenses are at fixed rates and not the actual expenses and also that the charges are based on another contract for arranging minimum quantity of sale of liquor from the godowns. 12. As per definition of C & F Agent as provided in 65 of the Finance Act, 1994, any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent is covered. From the facts of the case I find that the appellants are providing godowns for depositing of the goods by paying godown rent, are providing loading and unloading of the goods at godown thereby handling the goods, are providing marketing consultancy, providing telephone, paying freight, maintaining records, and providing s....
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.... the period prior to 2015 has been considered by Hon'ble Delhi High Court and then by Hon'ble Supreme Court in the case of Inter Continental Technocrat Consultancy 2018 (10) G.S.T.L. 401 (S.C.). By the said decision Hon'ble Supreme Court have quashed the provisions of Rule 5 provided for addition of such reimbursable expenses in value of taxable services is beyond the power conferred under Section 67. Relevant portion of the decision is reproduced below:- "21. Undoubtedly, Rule 5 of the Rules, 2006 brings within its sweep the expenses which are incurred while rendering the service and are reimbursed, that is, for which the service receiver has made the payments to the assessees. As per these Rules, these reimbursable 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 ....
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....by the service provider. 26. It is trite that rules cannot go beyond the statute. In Babaji Kondaji Garad, this rule was enunciated in the following manner : "Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the byelaw, if not in conformity with the statute in order to give effect to the statutory provision the Rule or bye-law has to be ignored. The statutory provision has precedence and must be complied with." 27. The aforesaid principle is reiterated in Chenniappa Mudaliar holding that a rule which comes in conflict with the main enactment has to give way to the provisions of the Act. 28. It is also well established principle that Rules are framed for achieving the purpose behind the provisions of the Act, as held in Taj Mahal Hotel : "the Rules were meant 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....
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.... 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 future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 29. The obvious basis of the principle against retrospectivity is the principle of "fairness", which must be the basis of every legal rule as was observed in 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....