TMI Blog1999 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... . - The petitioners in these cases are the persons who are utilising the services of goods transport operators and of clearing and forwarding agents and are seeking to impugn the validity of Rules 2(xii) and (xvii) of the Service Tax Rules, as amended in 1997, on the ground that the said sub-rules are contrary to the provisions of Sections 65 and 66 of the Finance Act, 1994, whereby service tax was sought to be levied by the Parliament. 2. A brief legislative history is that service tax was, for the first time, imposed by the Finance Act, 1994. This tax was proposed on three type of services which were rendered by the Finance Act, 1997, the Legislature sought to cast the net much wider. It amended certain provisions in the Act, and, thereafter rules which had originally been framed in 1994 were also amended. 3. By Chapter V of the Finance Act, as amended by the Finance Act, 1997 service tax is imposed in relation to the taxable services which are provided. Section 65 is the definition section. Some of the sub-clauses which are relevant for our purpose read as under : "65". (5) "Assessee" means a person responsible for collecting the service tax and includes his agent;" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mandap keeper in relation to the use of a mandap in any manner including the facilities provided to the client in relation to such use and also the services, if any, rendered as a caterer; (q) to any person, by a tour operator in relation to a tour; (r) to any person, by a rent a cab scheme operator in relation to the renting of a cab;" 4. Section 66 is the charging section which, after its amendment in 1997, reads as under : "66. Charge of service tax. - (1) On and from the commencement of this Chapter, there shall be charged a tax (hereinafter referred to as the service tax), at the rate of five per cent of the value of the taxable services referred to in sub-clauses (a), (b) and (d) of clause (41) of section 65 which are provided to any person by the person responsible for collecting the service tax. (2) With effect from the date notified under section 85 of the Finance (No. 2) Act, 1996 (33 of 1996), there shall be charged a service tax at the rate of five per cent of the value of the taxable services referred to in sub-clauses (c), (e) and (f) of clause (41) of section 65 which are provided to any person by the person responsible for collecting the service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a custom house agent to a client, shall be the gross amount charged by such agent from the client for service rendered in any manner in relation to the entry or departure of conveyances or in relation to the import or export of goods; (h) in relation to service provided by a steamer agent to a shipping line, shall be the gross amount charged by such agent from the shipping line for services in relation to a ship's husbandry or dispatch or any administrative work related thereto or in relation to the booking, advertising or canvassing of cargo, container feeder services, including the commission paid to such agent; (i) in relation to service provided by a clearing and forwarding agent to a client, shall be the gross amount charged by such agent from the client for services of clearing and forwarding operations in any manner; (j) in relation to service provided by a manpower recruitment agency to a client, shall be the gross amount charged by such agency from the client in relation to the recruitment of manpower in any manner; (k) in relation to service provided by an air travel agent to a customer, shall be the gross amount charged by such agent from the customer for serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (41) of section 65, the service tax for such service shall be collected from such person and in such manner as may be prescribed at the rate specified in section 66 and all the provisions of this Chapter shall apply to such person as if he is the person responsible for collecting the service tax in relation to such service. 2) The service tax collected during any calendar month in accordance with the provisions of sub-section (1) or sub-section (1A), as the case may be, shall be paid to the credit of the Central Government by the 15th of the month immediately following the said calendar month. (3) Any person, responsible for collecting the service tax, who fails to collect the tax in accordance with the provisions of sub-section (1) or sub-section (1A), as the case may be, shall, notwithstanding such failure, be liable to pay such tax to the credit of the Central Government within seventy-five days from the end of the month in which the service was rendered." 6. The procedure which has to be followed for collecting the service tax is prescribed by Section 70 which, inter alia , requires the person responsible for collecting the service tax to file the return in the prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot to our mind, in any way, amend any of the sub-sections of Section 65 which contains the definitions of different expressions. All that Section 68(1A) enables to be done is that with regard to the assessees or the persons who are responsible for collecting the service tax, the individual or the officer concerned can be identified and it is that person who would be a person responsible for collecting the service tax. In other words this provision, namely, Section 68(1A) cannot be so interpreted as to make a person as an assessee even though he may not responsible for collecting the service tax. The service tax is levied by reason of the services which are offered. The imposition is on the person rendering the service. Of course, it may be an indirect tax, it may be possible that the same is passed on to the customer but as far as the levy and assessment is concerned it is the person rendering the service who alone can be regarded as an assessee and not the customer. This is the only way in which the provisions can be read harmoniously. 10. By amending the definition of "person responsible for collecting of service tax" in the impugned rules with regard to services provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax who has not furnished the return within the time allowed under sub-section (1) or sub-section (2) or having furnished a return under sub-section (1) or sub-section (2), discovers any omission or wrong statement therein, may furnish a return or a revised return, as the case may be, at any time before the assessment is made. 71. Assessment. - (1) For the purposes of making an assessment under this Chapter, the Central Excise Officer may serve on any person, who has furnished a return under section 70 or upon whom a notice has been served under sub-section (2) of section 70 (whether a return has been furnished or not), a notice requiring him on a date therein to be specified, to produce or cause to be produced such accounts or documents or other evidence as the Central Excise Officer may require for the notice requiring the production of such further accounts or documents or other evidence as he may require. The Central Excise Officer, after considering(2) such accounts, documents or other evidence, if any, as he has obtained under sub-section (1) and after taking into account any relevant material which he has gathered, shall by an order in writing, assess the value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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