TaxTMI 
TaxTMI 
2025 (5) TMI 263
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.... under Section 76 and 78 of the Act as more specifically indicated therein. 2. Brief facts are that the appellant is registered with the service tax department for providing Customs House Agent service (CHA), Steamer Agent Service and Business Auxiliary Service. On scrutiny of the trial balance and schedules in respect of the financial years and the details of reimbursable expenses/commission received submitted by the appellant it was noticed by the Department that the Appellant apart from collecting service charges for providing CHA service, also incurred certain expenditure towards various charges towards procurement of services in the course of rendering Custom House Agent's service. 3. The Department was of the view that as per section 67(1) of the Act, where the provision of service is for a consideration in money, the taxable value of service is the gross amount charged by the service provider for providing service and according to Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 (Valuation Rules in short), expenditure or cost incurred by the service provider in the course of providing taxable service shall be treated as consideration for the taxable se....
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....ction 76 of the Act. Aggrieved by the said impugned order in original the appellant preferred an appeal before the Commissioner of Service Tax (Appeals-I), who however, vide the impugned OIA 106/2015 (STA-I) dated 20.04.2015, upheld the impugned OIOs of the adjudicating authority, holding, inter-alia, that the appellant had failed to evidence that they had acted as pure agents, even though the appellant's did provide a chartered accountant's certificate certifying that the appellant had billed their clients only the actual amount and furnished the data showing the details of income charged by them and expenditure met by them against such income under different heads of income and further the bill wise breakup of the same. Aggrieved by the aforementioned finding, the appellant has preferred the present appeals assailing the impugned OIA and is thus before this Tribunal. 5. The learned counsel, Ms. Radhika Chandrashekar, appeared and argued for the appellant. The learned counsel submitted that the appellant is in the business of providing service as a CHA and has discharged service tax on the consideration received for providing CHA services. It is submitted that while providing C....
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....isstatement, suppression of facts or contravention of any of the provisions of the chapter of the Act or the rules made thereunder with intent to evade payment of duty. The learned counsel submits that the question involved in the present matter is on interpretation of the provisions of the rules to determine the liability of the CHA to pay service tax on reimbursable expenses and thus no malafide can be attached to the appellant so as to warrant the invoking of extended period of limitation. Further, SCN was issued on the basis of the documents and Trial balance that the appellant had provided and hence no basis to invoke the proviso to section 73(1) has been made out. The Ld. Counsel stated that the issue is settled in the appellant's favour by various decisions and submitted the decision in UOI v Intercontinental Consultants and Technocrats Pvt Ltd, 2018 (10) GSTL 401 (SC) as well as the orders of this Tribunal vide Final order No.40197/2025 dated 12.02.2025, in M/s. International Clearing & Shipping Agency v Commissioner of GST & CCE, Chennai North Commissionerate and Final order No.40187/2025 dated 07.02.2015 in the case of M/s. Sri Runadasan Freight Services v Commissioner of....
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....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 sub-clauses 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 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., pr....
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....es 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 nature. On this aspect of the matter, we may usefully refer to the Constitution Bench judgment in the case of Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited [(2015) 1 SCC 1] wherein it was observed as under : "27. A legislation, be it a statutory Act or a statutory rule or a statutory notification, may....
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....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." 10. In the light of the Honourable Supreme Court's decision reproduced supra, which has been followed by this Tribunal in the decisions in Final order No.40197/2025 dated 12.02.2025, in M/s. International Clearing & Shipping Agency v Commissioner of GST & CCE, Chennai North Commissionerate and Final order No.40187/2025 dated 07.02.2015 in the case of M/s. Sri Runadasan Freight Services v Commissioner of GST & CE, cited by the appellant, we are of the considered view that the impugned order in appeal, upholding the demands of service tax as confirmed in the impugned orders in original on this count, cannot sustain. ....