TMI Blog2023 (8) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, it is opined that they are in the nature of the reimbursable expenses and cannot be termed to be expenditure incurred by the appellants in the course of provision of the service. Moreover, going by the latest decision of the Tribunal in the case of M.P. Security Force [ 2019 (8) TMI 211 - CESTAT NEW DELHI] , it is found that wages, EPF, ESI etc. cannot be included for the purpose of arriving at the value of taxable service for the purpose of Service Tax Valuation Rules. Extended period of limitation - HELD THAT:- vide a catena of judgments including that of PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] , it was held that mere non-obtaining of registration; non-filing of returns and nonpayment of service tax does not constitute a suppression with intent to evade service tax in order that extended period is liable to be invoked; there should be a positive act on the part of the assessee to show that there is such suppression or mis-statement etc. with intent to evade service tax. In the instant case, the Department has not adduced any evidence to this effect other than bare averment that extended period is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TL401 (SC) and submits that Rule 5 of service tax (Determination of Value) Rules, 2006 is ultra vires of Section 67 of Finance act 1994. He also submits that the said decision has been followed in the following cases. RAJCOMP INFO SERVICE LTD- 2022 (65) G.S.T.L. 103 (Tri. - Del.) GURUBANI SECURITY PVT. LTD.- 2021 (51) G.S.T.L. 404 (Tri. - Del.) INDIAN INSTITUTE FOR PRODUCTION MANAGEMENT- 2021 (46) G.S.T.L. 55 (Tri. - Kolkata) SECURITY GUARDS BOARD FOR GREATER BOM. THANE DIST- 2017 (51) S.T.R. 51 (TRI. - MUMBAI) M.P. SECURITY FORCE- 2020 (43) G.S.T.L. 253 (Tri. - Del.) 4. Learned counsel submits that alternatively the appellant was working as a pure agent of PRTC who was a principal employer and therefore in terms of Rule 5 of Service Tax (Determination of Value) Rules, 2006, the reimbursable expenses cannot be included. He further submits that during the period 1.04.2006 to 30.04.2006 only a Commercial Concern was taxable under Section 65 (68) of the Finance Act 1994; w.e.f01.05.2006, the word Commercial Concern was replaced by the words Any Person ; as the appellant was not a Commercial Concern , no service tax can be leviable upto 1.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross turnover of Rs.4,00,000/- in the preceding financial year. 8. Learned Authorized Representative submits that the appellant was liable to pay Service Tax in the prescribed manner and to file ST- 3 returns with the authorities; they have not paid Service Tax and have not filed ST-3 returns during the period 2006-07 to 2010-11, though they have registered themselves on 05.11.2004; therefore, extended period is fairly invokable. 9. Heard both sides and perused the records of the case. It is the case of the Department that the appellants have entered into a contract with PRTC and received the remuneration as per the contract on the basis of work hours per person; the contract does not provide for any deductions or additions on account of expenses towards the wages, EPF, ESI etc; the appellants have to include the amount under those Heads as per provisions of Section 67 of the Finance Act, 1994 and Rule 5 (2) of Service Tax (Determination of Value) Rules, 2006 and the appellants do not have a relationship of a pure agent and the principal employer. The Department also contends that it is incorrect to say that the appellant is not liable to pay service tax as they are not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides that the value of the taxable service shall be the gross amount charged by the service provider for such service . Reading Section 66 and Section 67(1)(i) together and harmoniously, it seems clear to us that in the valuation of the taxable service, nothing more and nothing less than the consideration paid as quid pro quo for the service can be brought to charge. Sub-section (4) of Section 67 which enables the determination of the value of the taxable service in such manner as may be prescribed is expressly made subject to the provisions of sub-section (1). The thread which runs through Sections 66, 67 and Section 94, which empowers the Central Government to make rules for carrying out the provisions of Chapter V of the Act is manifest, in the sense that only the service actually provided by the service provider can be valued and assessed to service tax. We are, therefore, undoubtedly of the opinion that Rule 5(1) of the Rules runs counter and is repugnant to Sections 66 and 67 of the Act and to that extent it is ultra vires. It purports to tax not what is due from the service provider under the charging Section, but it seeks to extract something more from him by including i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiver M/s. HNGIL directly into the respective heads of account. Therefore, in our considered view, service tax demand cannot be confirmed on the employer s contributed amount towards P.F., E.P.F. and E.S.I. In this order earlier decision of Tribunal in case of Neelav Jaiswal and Brothers v. Commissioner of Central Excise, Allahabad - 2014 (34) S.T.R. 225 (Tri. - Del.) was also considered, which is referred in the impugned order. In this regard, we also find that the Hon ble Allahabad High Court in the case of Ehardwez Security Services v. Union of India - in Civil Writ Petition No. 437 of 1998 held that the respondent shall be entitled to charge service tax on the gross except after giving the abatement in respect of statutory levy and the taxes and if the same has direct relation with the services rendered by the client and charged specifically in the bill. 10. As far as the abatement towards deduction of wages and salaries paid to the personal employees by the appellant is concerned, the same is covered by the decision of Mumbai Bench of this Tribunal in case of Security Guards Boards for Greater Bom. Thane Dist. v. CCE, Thane-II - 2017 (51) S.T.R. 51 (Tri. - Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards (supra) and Bombay Intelligence Security (India) Limited (supra). However, we find that it is not the case of the Department that the appellant is separately recovering the charges towards wages, EPF, ESI etc. and that the same are not reimbursable deductions. We find that though the agreement is on the basis of perkilometer per-person provided by the appellants to M/s PRTC, it is the PRTC who have also indicated the wages, PF etc. to be paid by the appellants. Notwithstanding the fact that the contract or the offer letter issued by PRTC does not indicate the wages etc. separately, the circular issued by them indicates the same. It is not the claim of the Department that such wages, PF etc. are not paid by the appellants or not paid in full by the appellants. Therefore, we are of the considered opinion that they are in the nature of the reimbursable expenses and cannot be termed to be expenditure incurred by the appellants in the course of provision of the service. Moreover, going by the latest decision of the Tribunal in the case of M.P. Security Force (supra), we find that wages, EPF, ESI etc. cannot be included for the purpose of arriving at the value of taxable service for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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