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TMI Blog2019 (7) TMI 1801X X X X Extracts X X X X X X X X Extracts X X X X ..... besides being imposed with penalty of like amount under section 78 of Finance Act, 1994. It was alleged that the appellant had, between April 2006 and March 2010, incurred expenditure in connection with 'technical inspection and certification service' and 'commercial training and coaching service' which were not included in the taxable value of services. 2. Learned Counsel for the appellant places reliance on the decision of the Hon'ble Supreme Court in Union of India v. Intercontinental Consultants and Technocrats Pvt Ltd [2018 (10) GSTL 401 (SC)] which has upheld the decision of the Hon'ble High Court of Delhi in Intercontinental Consultants & Technocrats (P) Ltd v. Union of India [2013 (29) STR 9 (Del)] that was discarded by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intendent (Audit) Group II (Service Tax), New Delhi issued a letter to the petitioner on the subject "service tax audit for the financial year 2002-03 to 2006- 07. In this letter, it was mentioned by the appellant that service tax was liable to be charged on the gross value including reimbursable and out of pocket expenses like travelling, lodging and boarding etc. and the respondent was directed to deposit the due service tax along with interest @ 13% under Sections 73 and 75 respectively of the Act. In response, the respondent provided month-wise detail of the professional income as well as reimbursable out of pocket expenses for the period mentioned in the aforesaid letter. Thereafter, a show cause notice dated March 17, 2008 was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed this as '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.' before going on to hold that '24. In this hue, the expression 'such' occurring in Section 67 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax is to be paid only on the services actually provided by the service provider. xx 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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