TMI Blog2019 (7) TMI 1801X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, and the non-acceptance of claim to be pure agent , as envisaged in rule 5(2) of Service Tax (Determination of Value) Rules, 2006 which serves to qualify exclusion from rule 5 (1) of the said Rules were based on the prescriptions that have been judicially erased. It is seen that rule 5(1) of the said Rules is a deeming provision for enhancement of the taxable value by including expenditure incurred for providing taxable service but charged separately, and not as consideration, from the recipient of service. The expenses that are under dispute were charged, and collected, independent of the consideration, from the recipient of service. Other than referring to the inclusions mandated by rule 5(1) of Service Tax (Determination of Value) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2013 (29) STR 9 (Del)] that was discarded by the adjudicating authority owing to pendency of appeal of Revenue. It was further pointed out that the Tribunal has followed this decision in Hitech Manpower Consultant Pvt Ltd v. Commissioner of GST Central Excise [2019 (5) TMI 159-CESTAT Chennai]. 3. Learned Authorised Representative points are that the terms of payment are explicitly incorporated in annexure 3 of the contract and that reimbursements for the facilities and conveniences have been provided for therein. In this connection, he points out that the Hon ble Supreme Court had, in re Intercontinental Consultants and Technocrats Pvt Ltd, narrated the background to the dispute before it thus 5. The assessee-M/s. Intercontinen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, a show cause notice dated March 17, 2008 was issued by the Commissioner, Service Tax, Commissionerate vide which the respondent was asked to show cause as to why the service tax should not be recovered by including the amounts of reimbursable which were received by the respondent, pointing out these were to be included while arriving at the gross value as per provisions of Rule 5(1) of the Rules. and submitted that, even with the declaration of rule 5 (1) of Service Tax (Determination of Value) Rules, 2006 as ultra vires, the provisions of section 67 of Finance Act, 1994 are applicable. 4. It is seen from the impugned order that the adjudicating authority has confirmed the demand on the finding that the agreement referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 the faith of the then existing law. 29. The obvious basis of the principle against retrospectivity is the principle of fairness , which must be the basis of every legal rule as was observed in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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