TMI Blog2023 (11) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... - HELD THAT:- The appellant had reasonable cause for failure to pay service tax and, therefore, by invoking section 80, the penalties are set aside. The appeal is partly allowed by setting aside the demand of service tax on reimbursable expenses towards electricity and air conditioning collected by the appellant and upholding the rest of the demand with interest. - MR. DILIP GUPTA, PRESIDENT AND MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL ) Present for the Appellant : Ms. Seema Jain, Advocate Present for the Respondent: Shri S K Meena, Authorised Representative ORDER M/s Varun Estates (P) Limited [the appellant] filed this appeal to assail the Order-in-Original dated 19.10.2016 passed by the Commissioner of Service Tax, Audit-I, New Delhi whereby he decided four show cause notices and confirmed a demand of Rs. 1,47,20,552/- under proviso to section 73 along with interest under section 75 and imposed penalties under sections 76, 77 and 78 of the Finance Act, 1994 [the Act]. 2. The appellant provides services of housekeeping and maintenance in the Mall. It is been paying service tax on the common area maintenance charges which it collects from the shops in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and according to the revenue service tax payable. 4. Thus, as far as the demand of service tax is concerned, the only two points of dispute are the amounts collected as reimbursement of electricity charges and reimbursement of air conditioning charges. 5. Learned counsel submits that as per the agreement which the appellant entered into with the shops in the Mall, the appellant has a common electricity connection with the electricity department and it, in turn, installed sub-meters in each of the shops. It raises bills and collects electricity charges from each of the shops based on the actual consumption plus 20%. The electricity charges which it collects from the shops are on the basis of the weighted rate per unit of electricity. She further clarifies that the electricity is charged at various rates as per various slabs by the electricity department. Further, in the Mall, electricity is supplied through the generator as backup in case of power failure and it involves different cost per unit. 6. Therefore, the appellant collects from the shops the cost for electricity based on the weighted average rate per-unit. In addition, it charges 20% extra to take care of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand of service tax on the reimbursement of electricity charges and reimbursement of air conditioning charges may be set aside in view the law laid down by the Supreme Court. 10. Learned counsel for the appellant also submits that if the appellant s prayer is not accepted on merits, the finding on the extended period of limitation may be set aside. She further prays that the penalties imposed on the appellant may be set aside invoking section 80 of the Finance Act, 1994 which was available during the relevant period as the appellant had reasonable cause for not paying the service tax as demanded. 11. Learned authorized representative appearing for the revenue reiterates the findings of the impugned order. 12. We have considered the submissions on both sides and perused the records. 13. The only question which remains to be decided by us insofar as the demand is concerned, is whether service tax is payable on the amounts which the appellant had collected as reimbursements towards electricity charges and reimbursement towards air conditioning charges for the amount of electricity and air conditioning actually consumed by the shops. It is not disputed that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding the expenditure and costs, Rule 5(1) goes far beyond the charging provisions and cannot be upheld. It is no answer to say that under sub-section (4) of Section 94 of the Act, every rule framed by the Central Government shall be laid before each House of Parliament and that the House has the power to modify the rule. As pointed out by the Supreme Court in Hukam Chand v. Union of India, AIR 1972 SC 2427: - The fact that the rules framed under the Act have to be laid before each House of Parliament would not confer validity on a rule if it is made not in conformity with Section 40 of the Act. Thus Section 94 (4) does not add any greater force to the Rules than what they ordinarily have as species of subordinate legislation. 15. After this judgment, section 67 Act was amended by section 111 of the Finance Act, 2015 as follows: 111. Amendment of section 67.- In section 67 of the 1994 Act, in the Explanation, for clause (a), the following clause shall be substituted, namely;- (a) consideration includes- (i) any amount that is payable for the taxable services provided or to be provided; (ii) any reimbursable expenditure or cost incurred by the service p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arity 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-a-vis 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 a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow s backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: Section 80. Penalty not to be imposed in certain cases (omitted) (1) Notwithstanding anything contained in the provisions of section 76, or section 77, no penalty shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was reasonable cause for the said failure. (2) Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President. 21. In the factual matrix of the case, we find that the appellant had reasonable cause for failure to pay service tax and, therefore, by invoking section 80, the penalties are set aside. In view of the above, the appeal is partly allowed by setting aside the demand of service tax on reimbursable expenses towards electricity and air conditioning col ..... X X X X Extracts X X X X X X X X Extracts X X X X
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