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TMI Blog2023 (11) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, issued four show cause notices dated 23.04.2013, 09.06.2014, 17.04.2015 and 04.04.2016 as follows. S No. SCN & date Period Demand of ST in Rs. Penalty imposed in Rs. 1 290/AE/Gr-11/2013-14 dated 23.04.2013 2007-08 to 2011-12 89,72,286/- 89,72,286/- Under section 78 2 203/DIV-I/2013-14 dated 09.06.2014 2012-13 19,20,358/- 5,74,827/- Under sec 76 10,000/-under section 77(2) 3 No. 07/DIV-IV/2015-16 dated 17.04.2015 2013-14 18,56,804/- 4 3/2016 dated 04.04.2016 2014-15 19,71,104/- TOTAL (2+3+4) 57,46,266/- Gr. Total 1,46,63,141/- 95,57,113/- 3. Of the above, the show cause notice dated 23.04.2013 was issued invoking extended period of limitation under the proviso to section 73 and penalty was proposed to be imposed under section 78. The other three show cause notices were issued within the normal period of limitation and proposed penalties under section 76 and 77(2). Learned counsel for the appellant submits that the appellant undertakes the following activities; (a) 'Common area maintenance' for which it charges operational and non-operational charges. It collects operational and non-operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on actual consumption of the electricity charges and air conditioning charges based on the actual consumption by the shops, are not exigible to service tax in terms of the judgment of the High Court of Delhi in Intercontinental Consultants & Technocrats Pvt. Limited vs. Union of India [2013 (29) STR 9 (Del)], wherein the High Court held that service tax can be charged only on the amounts charged for providing such service and, therefore, no service tax can be charged on the reimbursable expenses. After this judgment, Finance Act, 2015 was passed whereby section 67 was amended to include as consideration any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or to provide a taxable service, except in such circumstances and subject to such conditions as may be prescribed. She further submits that the Union of India had carried in appeal the judgment of High Court of Delhi in Intercontinental Consultants and it was disposed of by the Supreme Court in Union of India vs. Intercontinental Consultants & Technocrats Pvt Ltd. [2018 (10) GSTL 401(SC)] By the time this matter was heard by the Supreme Court, the amendment in the Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h levies a tax only on the taxable service and nothing else. There is thus in built mechanism to ensure that only the taxable service shall be evaluated under the provisions of 67. Clause (i) of sub-section (1) of Section 67 provides 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court also considered the effect of the legislative changes brought about in section 67 in Finance Act, 2015. The relevant extracts is as follows: " 29. In the present case, the aforesaid view gets strengthened from the manner in which the Legislature itself acted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with 'consideration' is suitably amended to include reimbursable expenditure or cost 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal rule as was observed in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later." 30. As a result, we do not find any merit in any of those appeals which are accordingly dismissed." 17. This judgment of the Supreme Court was followed in catena of Orders and decisions by this Tribunal and by other courts. 18. In view of above, we find that no service tax can be charged on the reimbursable expenses which the appellant had collected towards providing electricity and air conditioning. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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