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TMI Blog2025 (2) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... as penalty under Section 76 of the Act in respect of the SCN for the period 01.04.2008 to 31.03.2009. 2. Brief facts are that the appellants are engaged in the business of freight forwarding of imported and exported goods on port to port basis and registered with the department for providing Cargo Handling Service, Business Auxiliary Service etc. During the course of audit conducted by the Internal Audit Party it was noticed that the Appellants, apart from their freight forwarding business, also procured the orders for CHA service from their clients and engaged the services of their customs brokerage arm M/s. Transglobal Logistics (hereinafter referred to as M/s. Transglobal) who held customs licence for CHA operations. M/s. Transglobal raise invoices on the appellants for their service charges (agency charges) only. The Appellants raise invoices on their clients for the charges incurred during CHA service like documentation charges, examination charges, transportation charges, loading and unloading charges and other receipted charges like freight, steamer agent charges, port charges, AAI charges, survey charges, octroi, customs duty etc. However, the appellants have not included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to light; a show cause notice (SCN) No.466/2009 dated 14.10.2009 was issued demanding the aforementioned service tax payable along with appropriate interest as well as proposals to impose penalties, covering the period 19.04.2006 to 31.03.2008. Yet another SCN No.565/2009 dated 21-10-2009 along the same lines was issued for the period 01.04.2008 to 31.03.2009. Consequent to the replies filed by the appellants, a personal hearing was granted, subsequent to which the adjudicating authority issued the impugned order in original No.43 & 44/2011 dated 28.04.2011 rendering a finding that the said reimbursable expenses cannot be excluded from the gross amount and consequently the appellant is liable to pay service tax along with interest on such reimbursable expenses reimbursed by their clients. Accordingly, the demands proposed in the show cause notices were confirmed along with demand of appropriate interest and imposition of penalties under Section 76 and Section 78 of the Act. Aggrieved by the said impugned orders in original the appellants preferred an appeal before the Commissioner of Service Tax (Appeals-I), who however, vide the impugned OIA 103/2015 (STA-I) dated 20.04.2015, up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that the extended period in terms of proviso to Section 73(1) can be invoked only when there is fraud, collusion, wilful misstatement, suppression of facts or contravention of any of the provisions of the chapter of the Act or the rules made thereunder with intent to evade payment of duty. The learned counsel submits that the question involved in the present matter is on interpretation of the provisions of the rules to determine the liability of the CHA to pay service tax on reimbursable expenses and thus no malafide can be attached to the appellant that warrants the invoking of extended period of limitation. 7. Learned Authorised Representative, Shri. N. Satyanarayanan, appeared for the Department and reiterated the findings in the impugned order in appeal. 8. We have heard both sides, perused the appeal records and the case laws cited by the appellants. 9. We find that the appellate authority has upheld the impugned orders in original finding that the reliance placed by the adjudicating authority on Rule 5(1) of the Valaution Rules in confirming the demands made by the impugned orders in original, is tenable in law. We find that the issue is no more res-integra in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference 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 for charging service tax, the authorities are to find what is the gross amount charged for providing 'such' taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service cannot a part of that valuation as that amount is not calculated for providing such 'taxable service'. That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasised that Rule 5 of the Rules went much beyond the mandate of Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (Central)-I, New Delhi v. Vatika Township Private Limited [(2015) 1 SCC 1] wherein it was observed as under : "27. A legislation, be it a statutory Act or a statutory rule or a statutory notification, may physically consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work of fiction/non-fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique 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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