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TMI Blog2019 (6) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... ST/00364/2010 & ST/MISC/50264/2019[DB] - Final Order No: 50780 /2019 - Dated:- 1-5-2019 - MR. DILIP GUPTA, PRESIDENT AND MR. BIJAY KUMAR, MEMBER (TECHNICAL) Shri Mohit Singh, Advocate for the appellant Shri G R Singh, Authorized Representative for the respondent ORDER 1. This appeal arises out of the Order-in-Original No. 34(ST)-RPR-APPEAL-1-2009 dated 10/12/2009 by which learned Commissioner (Appeal) has upheld the order passed by the Additional Commissioner of Customs dated 30/03/2009. 2. Brief facts of the case are that the appellant is a company engaged in providing clearing and forwarding Agency s services and registered with the Department since 1999 under the provisions of Finance Act, 1944(hereinafter referred to as Finance Act ). The appellant had been paying service tax on the consideration received from their clients and also filing their ST-3 Returns regularly. The dispute arose between the Department and the appellant regarding inclusion of certain reimbursement expenses such as freight, stationary, printing charges, telephone charges, asset hire, courier, insurance and other taxes while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made under Section 94 of the Act can only be made for carrying out the provisions of this Chapter (Chapter V of the Act) which provides for levy quantification and collection of the service tax. In the process, the High Court observed that the expenditure or cost incurred by the service provider in the course of providing the taxable service can never be considered as the gross amount charged by the service provider for such service provided by him, and illustration 3 given below the Rule which included the value of such services was a clear example of breaching the boundaries of Section 67. The High Court even went on to hold further pointed out that it may even result in double taxation inasmuch as expenses on air travel tickets are already subject to service tax and are included in the bill. No doubt, double taxation was permissible in law but it could only be done if it was categorically provided for and intended; and could not be enforced by implication as held in Jain Brothers v. Union of India [(1970) 77 ITR 107]. The High Court has also referred to many judgments of this Court for the proposition that Rules cannot be over-ride or over-reach the provisions of the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 (Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the 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. 5. This judgment of Supreme Court covers the period pre and post 2006, which is clear from the paragraph 6 and 8 of the judgment which is also reproduced as under; 6 . Rule 5 was brought into existence w.e.f. June 1, 2007. The demand which was made in the show cause notice was covered by the period from October, 2002 to March, 2007. Against this show cause notice, the respondent preferred Writ Petition No. 6370 of 2008 in the High Court of Delhi challenging the vires thereof with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged by the insurer from the policy holder; (d) the commission received by the air travel agent from the airline; (e) the commission, fee or any other sum received by an actuary, or intermediary or insurance intermediary or insurance agent from the insurer; (f) the reimbursement received by the authorized service station from manufacturer for carrying out any service of any motor car, light motor vehicle or two wheeled motor vehicle manufactured by such manufacturer; and (g) the commission or any amount received by the rail travel agent from the Railways or the customer. But does not include - (i) initial deposit made by the subscriber at the time of application for telephone connection or pager or facsimile (FAX) or telephone or telex or for leased circuit; (ii) the cost of unexposed photography film, unrecorded magnetic tape or such other storage devices, if any, sold to the client during the course of providing the service; (iii) the cost of parts or accessories, or consumable such as lubricants and coolants, if any, sold to the customer during the course of service or repai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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