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TMI Blog2024 (9) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... e termed as pure agent as per Rule 5 of the Service Tax (Determination of Value) Rules, 2006 and hence all such value are required to be included in the value for the purpose of charging service Tax on the said services and hence is required to discharge the Service Tax liability accordingly'. The logic adopted by the learned Commissioner (Appeal) in his above mentioned findings is legally not sustainable as Hon'ble Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. in its order dated 30.04.2012 [ 2012 (12) TMI 150 - DELHI HIGH COURT] have held that Rule 5 (1) of the Service Tax Valuation Rules is contrary to the provision of Section 67 of the Finance Act, 1994 and thus has been declared Rule 5(1) as ultra virus. The transportation charges reimbursed to the appellant by their principals are on actual basis of the amount incurred by them on transportation of goods on behalf of their principals as pure agent and same are not includable in the taxable value of services for the appellant. The impugned Order-In-Appeal is without any merit and is set aside - appeal allowed. - HON'BLE MR. RAMESH NAIR, MEMBER ( JUDICIAL ) HON'BLE MR. C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has only made payments for good transport service on behalf of his principle client as an agent of the principles and therefore the principles were liable to discharge the Service Tax liability on reverse charge basis for Goods Transport Service Agency payments which have been made by them. 2.2. The learned Advocate has relied upon various case laws which are as mentioned below :- 2019 (25) G.S.T.L. 107 (Tri.-Mad) TOLL INDIA LOGISTICS PVT. LTD. Vs. CCE, PUDUCHERRY 2003 (5) TIM 1- CESTAT, BANGLORE- EV MATHAI CO. VS. CCE, COCHIN 2020 (1) TMI 1232- CESTAT MUMBAI- M/S. COSMOS CLEARING AGENCIES VS. CCE, NAGPUR-II 2003 (5) TMI 1 CESTAT, BANGLORE- EV MATHAI CO. VS. CCE, COCHIN 3. Having heard both the sides, we are of the view that appellant have recovered certain reimbursement expenditure which have been made by them for transport of goods on behalf of their principals namely M/s. Adani Willmar Limited. 3.1. It is also matter of record that the charges with regard to the C and F agent service received by the appellant have already been declared by them in their ST-3 returns and on the same due amount of the Service Tax had already been paid. 4. We find that the learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipulated provisions for determination of true service Tax liability. The documentary evidences are sufficient to prove the wrong practice adopted by the appellant of non-inclusion of such consideration and consequent evasion of Service Tax by them in this regard my view has been buttressed by the Judgement in case of M/s Jaihind Projects Ltd. reported at 2010(18) STR 650(Tri. Ahmd.) 5.5. Further the appellant had provided the services related to clearing and forwarding agency and has accepted the fact in their various statements. It is quite clear that the clearing and forwarding agency service is chargeable to service Tax as per provisions of Finance Act, 1994 and the appellant has to discharge the Service Tax liability pertaining to the services provided by them. 6. In light of the provisions and the facts discussed above, I am of the view that the appellant was required to include such value as determined by the adjudicating authority while arriving at the taxable value for discharging their Service Tax liability. The appellant has also contravened the provisions of Section 68 of Finance Act, 1994 read with Rule 6 of Service Tax Rules, 1994 in as much. as they failed to make the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e safety of goods dispatched to it by the principal M/s. HUL from the time of receipt thereof by it, until the goods are loaded to the road transport carriers for onward dispatch as per the instruction of principal. The consideration of services rendered by the appellant is contained in Clause 26 in the said agreement. The service charges/remuneration was received by the appellant for inward and outward handling, in accordance with the rates specified in the said agreement. Except the amount agreed upon towards service charges from time to time, the appellant was not entitled to any remuneration, reimbursement or any other monetary benefit for any service provided under the said agreement. 6. However, the Ld. Adjudicating Authority at paragraph 22 has observed that transportation of goods for M/s. HUL was being done by the appellant as a part and parcel of C F service and thus, the remuneration received towards freight and other expensed incurred by it are includible in the value of such taxable service as per the provisions of Rule 5 (1) ibid. Valuation provisions for the purpose of charging service tax are contained in Section 67 ibid. The said statutory provisions mandate that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66, 67 and Section 94, which empowers the Central Government to make rules for carrying out the provisions of Chapter V of the Act is manifest, in the sense that only the service actually provided by the service provider can be valued and assessed to service tax. We are, therefore, undoubtedly of the opinion that Rule 5 (1) of the Rules runs counter and is repugnant to Sections 66 and 67 of the Act and to that extent it is ultra vires. It purports to tax not what is due from the service provider under the charging Section, but it seeks to extract something more from him by including in the valuation of the taxable service the other expenditure and costs which are incurred by the service provider in the course of providing taxable service . 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. As pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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