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TMI Blog2025 (2) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... rty it was noticed that the Appellant apart from collecting service charges for providing CFA service, also collected charges like EB charges, courier charges, telephone charges, printing expenses, maintenance, packing material used, staff welfare, labour charges, miscellaneous and conveyance charges used in the course of providing the CFA service from their clients. However, the appellant has not included the aforementioned charges collected in the gross taxable value for the purpose of payment of service tax and did not pay service tax on the same claiming the said charges to be reimbursable expenditure and not exigible to service tax. 3. The Department was of the view that as per section 67(1) of the Act, where the provision of service is for a consideration in money, the taxable value of service is the gross amount charged by the service provider for providing service and according to Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 (Valuation Rules in short), expenditure or cost incurred by the service provider in the course of providing taxable service shall be treated as consideration for the taxable service and is includible in the taxable value. Again, Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said impugned order in original the appellant preferred an appeal before the Commissioner of Service Tax (Appeals-II), who however, vide the impugned OIA 81/2015 (STA-II) dated 03.03.2015, upheld the impugned OIO of the adjudicating authority. The appellant has preferred the present appeal assailing the impugned OIA and is thus before this Tribunal. 5. The learned counsel, Ms. Nivedita Mehta appeared and argued for the appellant. The learned counsel submitted that the appellant receives stock of the goods from the principal M/s. Nestle in containers by road and as C & F agent, the appellant is required to arrange for unloading the containers, storing the goods in the godown premises and thereafter dispatch the material to various distributors based on the instructions of the principal. It is submitted that for the above services the appellant is paid a fixed remuneration on per case basis per month and all the expenses involved in carrying out the aforesaid activity, for instance the labour expenses involved in unloading from the containers and loading in trucks, is entirely borne by the Appellant and no additional amount is paid to the appellant for reimbursing the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt Ltd v UOI, 2013 (29) STR 9 (Del), wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The Honourable Supreme Court had also noticed the nature of reimbursable expenses that arose for consideration in the facts of the case as well as that in connected appeals before it, and has gone on to hold as under: "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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 28. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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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