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TMI Blog2025 (4) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... tment that the Appellant apart from collecting charges for providing CHA service also collected various charges such as freight, steamer agent charges, port dues, CFS charges, detention charges, survey charges, customs duty etc., 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 said charges. 2.2 A show cause notice was issued alleging that the above charges collected from the clients are to be treated as expenditure or costs incurred by the appellant in the course of providing taxable service and all such expenditure or cost form part of the taxable service provided and are liable to be included in the gross value for the purpose of charging service tax on the Custom House Agent Service, as per provisions of Section 67 of the Act read with Rule 5(1) of the Service Tax Valuation Rules. After following due process of law, the adjudicating authority issued the Order in Original No.42/2011 dated 28.04.2011 confirming the demand of Rs.12,82,747/- proposed in the show cause notice for the period September 2006 to September 2008 under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Honourable Supreme Court has in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, reported in (2018) TIOL 76-SC-ST : 2018 (10) GSTL 401 (SC), affirmed the decision of the Delhi High Court 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. He also placed reliance on the decisions of this Tribunal in similar fact circumstances in the case of M/s. World Wide Logistics (I) (P) Ltd Vs Commissioner of GST & Ce, Chennai South Commissionerate reported in 2025(2) TMI 481-Cestat Chennai and M/s. Vaidhyanathan Iyer & Co. Vs. Commissioner of GST and Central Excise, Chennai Outer Commissionerate reported in 2025(2) TMI 417-Cestat Chennai. 5. Learned Authorised Representative, Shri. N. Satyanarayana, appeared for the Department and reiterated the findings in the impugned order in appeal. 6. We have heard both sides, perused the appeal records and the case laws cited by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable and specifically referred to in various sub- clauses of Section 65. Further, it also specifically mentions that the service tax will be @ 12% of the 'value of taxable services'. Thus, service tax is reference 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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