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TMI Blog2025 (1) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... L) Shri Rajesh Chhibber, Advocate for the Appellant Shri A. K. Choudhary, Authorized Representative for the Respondent ORDER This appeal is directed against Order-in-Appeal No.260-CE/MRT-II/2007 dated 17.12.2007 passed by Commissioner (Appeals) Customs Central Excise, Meerut-II. By the impugned order Order-in-Original No.137-ST/Anand/HPR/2007 dated 09.08.2007 holding as follows has been upheld:- ORDER a) Service Tax amounting to Rs.2,27,292/- (Rs.2,29,606/- (-) Rs.2,314/-) is confirmed in terms of Section 68 during the year 2004-05. b) Interest on the said amount of Service Tax in terms of Section 75 of the Finance Act, 1994 is confirmed. c) Penalty amounting to Rs.500/- (Five Hundred only) in terms of Section 75A of the Finance Act, 1994 is imposed for failing to obtaining the Registration. d) Penalty amounting to Rs.100/- (for everyday during which such failure continues but not exceed the amount of Service Tax payable) in terms of Section 76 of the Finance Act, 1994 is imposed for contravention of Section 68 of the Finance Act, 1994. e) Penalty amounting to Rs.1000/- (One Thousand only) in terms of Section 77 of the Finance Act, 1994 is imposed. f) Penalty amounting to Rs.2,27,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. They have also said that only in one case they received commission on which they have paid service tax now. They have also said that the activities of loading and unloading and the other jobs undertaken for which reimbursement of expenses has been made by SSML are not covered under the purview of service tax. 9. I, however, find that in reply to the show cause notice, the appellants have said that apart from providing loading unloading service, they were also providing marketing consultancy for which a retainership fee was received by them under a separate contract. The copies of these contracts have not been provided by them with the appeal. They have further said that they incur expenses towards marketing in the form of entertainment, postage, telegram, godown rent, printing stationery, travelling, telephone and freight for which they receive payment from SSML in the form of reimbursement of expenses under a separate contract. They have added that the activity of brand promotion of the liquor of SSML by collecting data regarding market size, customer feedback, devising of sales promotion schemes etc. were not covered within the ambit of C F Agents and as such no service tax wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is a similar condition in case of another contract for reimbursement of expenses where also an agreed amount is payable per BL subject to the same condition of sale of minimum guaranteed quantity of liquor. Further this amount is payable in addition to the commission being paid to them. It clearly shows that they have been receiving commission for arranging sales of the goods and in addition they are carrying out activities namely loading unloading of goods at godowns, payment of godown charges, marketing and sales promotion activities, maintenance of records at godowns, raising of invoices on behalf of the principal, other clerical jobs at godowns. It is also evident from the contracts that they have an agreement for making an agreed quantity of sale from the godowns but this agreement has not been disclosed to the Department. It is further evident from the contracts between the appellant and SSML that the charges in the name of reimbursement of expenses are at fixed rates and not the actual expenses and also that the charges are based on another contract for arranging minimum quantity of sale of liquor from the godowns. 12. As per definition of C F Agent as provided in 65 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said relied upon decision of Hon ble Tribunal are of no relief to the appellants as the same are not applicable here. 4.3 We find that the basic issue for consideration in the present appeal is with regard to addition of certain reimbursable expenses in the value of taxable services provided by the appellant. These amounts are received under separate contract, as observed in para 9 of the impugned order. 4.4 The issue with regard to the addition of such reimbursable expenses in the value of the taxable services provided for the period prior to 2015 has been considered by Hon ble Delhi High Court and then by Hon ble Supreme Court in the case of Inter Continental Technocrat Consultancy 2018 (10) G.S.T.L. 401 (S.C.). By the said decision Hon ble Supreme Court have quashed the provisions of Rule 5 provided for addition of such reimbursable expenses in value of taxable services is beyond the power conferred under Section 67. Relevant portion of the decision is reproduced below:- 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 paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition did not change even in the amended Section 67 which was inserted on May 1, 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 sub-section (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 in the following manner : Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the byelaw, if not in conformity with the statute in order to give effect to the statutory provision the Rule or bye-law has to be ignored. The statutory provision has precedence and must be complied with. 27 . The aforesaid principle is reiterated in Chenniappa Mudaliar holding that a rule which comes in conflict with the main enactment has to give way to the provisions of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 lex prospicit non respicit : law looks forward not backward. As was observed in Phillips v. Eyre [(1870) LR 6 QB 1] , a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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