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TMI Blog2018 (5) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 27.3.2008. The issue involved in this appeal is in relation to the value of taxable services as to whether the amounts received as reimbursement by the C F Agent from the principal is to be included in the taxable value for the purpose of calculation of service tax. 2. The respondent is a clearing and forwarding agent on behalf of M/s. Chettinad Cement Corporation Ltd., Chennai. They were paying service tax on the service charges received by them at ₹ 5.00 per MT, which includes service tax as per the agreement entered with their principal. As it appeared that the respondent were not paying service tax on the amount of service charges/commission received from the principals, a show-cause notice was issued to them demanding service tax alleging that reimbursable expenses such as loading, unloading, transportation (freight) and other expenses that are initially incurred by the C F Agent on behalf of the principals and subsequently, reimbursed are includable in the gross taxable value. The matter was adjudicated and the demand was confirmed along with interest and imposition of penalty under Section 76 of the Finance Act, 1994. In appeal, the learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neration/commission would nevertheless include expenditure incurred by the assessee providing the services; that all incidental charges for running of the business would also form part of the remuneration or Commission (by whatever name called). The phrase by whatever name called must necessarily have some link or reference or nature to the receipt of remuneration or commission. Thus, if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration/commission. 8. As per Rule 6(8) of Service Tax Rules, 1994, the gross amount referred to therein would apply to receipts of such sum, which would bear the character of remuneration or commission, in that, the said sum is brought under the head receipts . 9. As far as the present case is concerned, when the Revenue s case does not rest on a contention that the expenditure incurred has the character to fall under the expression remuneration or commission , we have no hesitation in rejecting the Revenue s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment, with effect from, May 01, 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 Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider '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) This position did not change even in the amended Section 67 which was inserted on May 01, 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 subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work of fiction/non-fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative drafting and latter one is to be found in the various principles of interpretation of statutes . Vis-a-vis ordinary prose, a legislation differs 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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