TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 199
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....mitted by the appellant herein requires thorough verification. 2. Brief facts are that the appellant is registered with the service tax department for providing Customs House Agent service (CHA). During the course of Audit, it was noticed by the Department that the Appellant apart from collecting service charges for providing CHA service, also collected various charges such as Harbour/CFS dues, IAAI Charges, Loading and unloading, surveyor fees, freight/steamer agent charges and insurance charges, from their clients, in the course of rendering Custom House Agent's service. It was seen that the appellant had excluded the said charges and did not pay service tax on the same claiming that the said charges being reimbursable expenditure, are not leviable to tax. 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 provi....
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....rkup. The adjudicating authority further placed reliance on the Final Order No.1153-1156/2011 dated 21.10.2011 whereby this Tribunal had dismissed the Departmental appeal filed on a similar issue of reimbursable expenses incurred as a pure agent and rendered a finding that the allegations made in the show cause notice failed and consequently the demands proposed also fail and the question of imposing penalty does not arise. Finding thus, the adjudicating authority dropped all the proceedings initiated under the aforementioned show cause notices. Aggrieved by the said impugned order in original the department preferred an appeal before the Commissioner of Service Tax (Appeals-I), who however, vide the impugned OIA set aside the impugned OIOs of the adjudicating authority, and remitted the matter to the adjudicating authority as aforementioned. Aggrieved and dissatisfied by the impugned OIA, the appellant having preferred the present appeals 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 servic....
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....apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt Ltd v UOI, 2013 (29) STR 9 (Del), wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The Honourable Supreme Court had also noticed the nature of reimbursable expenses that arose for consideration in the facts of the case as well as that in connected appeals before it, and has gone on to hold as under: "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'. Therefor....
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....ted on May 1, 2006. Sub-section (4) of Section 67 empowers the rule making authority to lay down the manner in which value of taxable service is to be determined. However, Section 67(4) is expressly made subject to the provisions of sub-section (1). Mandate of sub-section (1) of Section 67 is manifest, as noted above, viz., the service tax is to be paid only on the services actually provided 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 establish....
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.... 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 future acts ought not to change the character of past transactions carried o....