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TMI Blog2024 (7) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice (BAS) as has been held of the Adjudicating Authority. The re-imbursement received by the Appellant in the course of providing their service, the issue is no more res integra. The Hon ble Delhi High Court in the case of INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. VERSUS UOI. ANR. [ 2012 (12) TMI 150 - DELHI HIGH COURT] where it was held that ' What is brought to charge under the relevant Sections is only the consideration for the taxable service. By including the expenditure and costs, Rule 5(1) goes far beyond the charging provisions and cannot be upheld. It is no answer to say that under sub-section (4) of Section 94 of the Act, every rule framed by the Central Government shall be laid before each House of Parliament and that the House has the power to modify the rule.' All the data which has been used for quantification of the demand emanates from the Profit and Loss account of the Appellant. All these facts show that there has been no attempt on the part of the appellant to suppress any fact. The Department has not come out with any concrete evidence to the effect that the Appellant has deliberately suppressed any facts to evade Service Tax payment - th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction by the Appellant. As a matter of fact, in some cases, they may end up is not being able to sell the cargo space which is the loss to be borne by the Appellant. Therefore, she submits that this activity cannot be treated as Business Auxiliary Service as being viewed by the Revenue for confirming the demand. She relies on the decision of the Delhi Tribunal in their own case wherein the Appeal filed by the Revenue was dismissed. 3. While rendering the normal services to their clients as CHA and on account of cargo handling services, the Appellant is required to make many payments on behalf of the clients. The clients reimburse the amounts to the Appellant. If the P L Account is properly scrutinized, it would clarify that the expenses incurred and the amounts reimbursed both become part of the Profit and Loss account. If this reimbursement is treated as consideration as is being done by the Revenue, in the normal course, the Appellant would not have spent the same amount for procuring the services from others. The very fact that this amount forms part of both earning and expenditure clearly establishes the fact that this is the case where reimbursement is being given by the clien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority. 10. We also find that similar issue had come up before the Delhi Tribunal in the case of the present Appellant s and the Tribunal vide Final Order No. 57330/2017 dated 20/10/2017 has held as under:- 2. The brief facts of the case are that, the assessee Respondents are engaged in various activities as Customs House Agent and Freight Forwarder. The dispute in the present appeal relates to their tax liability under the category of Business Auxiliary Service for the period 01.07.2003 to 31.03.2007. As freight forwarder, the assessee-Respondents earned income of two types; one relating to profit on selling the space in the aircraft which they have purchased earlier and later made available to various cargo shippers, and another in the form of commission received from the airlines based on the business they provided to these airlines in transport of cargo. The Revenue sought to tax both the incomes under Business Auxiliary Services by treating them as consideration for promoting the services of another person. The original authority held that the assessee- Respondents are liable to pay the Service Tax only with respect to Commission received from airlines w.e.f. 10.09.2004 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incentive sought to be text under BAS. It is seen that the said income is generated during the course of booking of bulk cargo by the appellant with the airline. The appellant have received the incentive and commission from the airline. The appellants are engaged in buying and selling of space in the airline and depending on the volume of the space bought by the appellant from the airlines they received the commission/incentive. The appellants are not buying and selling space on the airline on behalf of their client but on their own behalf. To consider the activity of buying and selling the taxable activity under the head of BAS, the same should be done on behalf of the client. Thus, if the appellants were selling the space on carrier from the airline directly to the exporters without themselves purchasing the space then it could have been considered as an activity involving promotion of sales. In the instant case the appellant are directly buying themselves and thereafter selling the same to the exporters. In this activity they are receiving incentive and commission based on the total space purchase by them from the airline. This activities can be no stretch of imagination by cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 66 is on the value of taxable services. The taxable services are listed in Section 65(105). The service provided by the petitioner falls under clause (g). It is only the value of such service that is to say, the value of the service rendered by the petitioner to NHAI, which is that of a consulting engineer, that can be brought to charge and nothing more. The quantification of the value of the service can therefore never exceed the gross amount charged by the service provider for the service provided by him. Even if the rule has been made under Section 94 of the Act which provides for delegated legislation and authorises the Central Government to make rules by notification in the official gazette, such rules can only be made for carrying out the provisions of this Chapter i.e. Chapter V of the Act which provides for the levy, quantification and collection of the service tax. The power to make rules can never exceed or go beyond the section which provides for the charge or collection of the service tax. 18. Section 66 levies service tax at a particular rate on the value of taxable services. Section 67(1) makes the provisions of the section subject to the provisions of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule if it is made not in conformity with Section 40 of the Act. Thus Section 94(4) does not add any greater force to the Rules than what they ordinarily have as species of subordinate legislation. 19. For the above reasons we quash the impugned show-cause notice and allow the writ petition with no order as to costs. [ Emphasis supplied ] 13. On Appeal by the Revenue before Supreme Court, the Hon ble Apex Court in the case of Union of India Vs. Intercontinental Consultants Technocrafts Pvt. Ltd., cited supra has held as under:- 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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