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TMI Blog2025 (3) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority confirming the demand of service tax payable, but has however, inter-alia, restricted the demand to the period April 2009 to November 2009. In this appeal, the facts in brief are that during the aforementioned period the appellant had collected charges levied by National Securities Depository Limited (NSDL charges) and that levied by Central Depository Services Limited (CDSL charges), under the name 'Transaction charges' from their clients, in accordance with the agreement that they enter into with the client whereby the client has undertaken to reimburse such incidental expenses, and paid such collected amounts to NSDL and CDSL respectively. For the services as stock broker, the appellant has collected other charges including its brokerage fee for executing the orders of the clients and paid service tax on the gross amount collected from the clients except on the aforementioned 'transaction charges.' 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and according to Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 (Valuation Rules), 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, quantified such 'transaction charges' that had been collected from the clients and paid to NCDEX and MCX and issued SCN proposing to demand service tax, applicable interest and proposing imposition of penalties. It is pursuant to the litigious journey through the adjudicatory and appellate hierarchy that the appellant is presently before this Tribunal having preferred the instant appeal against the impugned OIA. 4. The learned consultant, Shri. P. Raja Praveen appeared and argued for the appellant. The learned consultant submitted that the SCNs in these appeals have demanded service tax on the 'transaction charges' by invoking Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 (Valuation Rules 2006) which has since been struck down by the Honourable Delhi High Court in the Intercontinental Technocrats case and which stood affirmed by the Honourable Supreme Court. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal records and the case laws cited by the consultant. 8. 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 Valuation Rules in confirming the demands made by the impugned orders in original, is tenable in law and that the appellants do not satisfy the conditions to bring them within the ambit of pure agent as per Rule 5(2) of the Valuation Rules. The demands in both these appeals pertain only to the amounts that was reimbursed to the appellants and which the appellant had paid to the respective stock and commodity exchanges and the service tax liability quantified thereon. 9. We find that the issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, 2018 (10) GSTL 401 (SC) which has considered the issue of liability to pay service tax on reimbursable expenses received by the 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 amount charged by the service provider 'for such service' and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25. This position 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter, 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 legislative drafting and latter one is to be found in the various principles of "interpretation of statutes". Vis-avis ordinary prose, a legislation differs in its provenance, layout and features as also in the implication as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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