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TMI Blog2025 (2) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... is registered with the service tax department for providing Customs House Agent service (CHA service in short). During the course of audit conducted by the Internal Audit Party it was noticed that the Appellant apart from collecting service charges for providing CHA service, also collected charges such documentation charges, Misc. Ex for S/B, B/E, Examination Expenses, Misc. Exp for T.B, opening and repacking charges, Misc. Exp for A.R.1 copy and EP copy, misc. Exp for bonding/debonding, loading and unloading charges, petties and sundries, sundry expenses, seal verification charges, delivery expenses, EDI coupon, Customs duty, AAI Charges, DO/ LCL charges, survey fees etc. from the clients. However, the appellant has not included the aforementioned charges collected in the gross taxable value for the purpose of payment of service tax and did not pay service tax on the same claiming the said charges to be reimbursable expenditure and not exigible to service tax. 3. The Department was of the view that as per section 67(1) of the Act, where the provision of service is for a consideration in money, the taxable value of service is the gross amount charged by the service provider for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was confirmed along with demand of appropriate interest and imposition of penalties under Section 77 and Section 78 of the Act. Aggrieved by the said impugned order in original the appellant preferred an appeal before the Commissioner of Service Tax (Appeals-I), who however, vide the impugned OIA No. 108/2015 (STA-I) dated 20.04.2015, upheld the impugned OIO of the adjudicating authority. The appellant has preferred the present appeal assailing the impugned OIA and is thus before this Tribunal. 5. The learned counsel, Shri. S. Murugappan appeared and argued for the appellant. The learned counsel submitted that the appellant is in the business of providing service as a CHA and has discharged service tax on the consideration received for providing CHA services. It is submitted that during the course of providing CHA services the appellant has incurred expenses such as EDI charges, AAI charges, DLO charges, transport charges, survey charges etc. paid to third parties and Customs Department on behalf of the client. These expenses are reimbursed by the client on actuals. The appellant did not discharge service tax on the reimbursable expenses as it is not a consideration for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Intercontinental Consultants and Technocrats Pvt Ltd, 2018 (10) GSTL 401 (SC) which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt Ltd v UOI, 2013 (29) STR 9 (Del), wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The Honourable Supreme Court had also noticed the nature of reimbursable expenses that arose for consideration in the facts of the case as well as that in connected appeals before it, and has gone on to hold as under: - "21. Undoubtedly, Rule 5 of the Rules, 2006 brings within its sweep the expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25. This position did not change even in the amended Section 67 which was inserted on May 1, 2006. Sub-section (4) of Section 67 empowers the rule making authority to lay down the manner in which value of taxable service is to be determined. However, Section 67(4) is expressly made subject to the provisions of sub-section (1). Mandate of sub-section (1) of Section 67 is manifest, as noted above, viz., the service tax is to be paid only on the services actually provided by the service provider. 26. It is trite that rules cannot go beyond the statute. In Babaji Kondaji Garad, this rule was enunciated in the following manner : "Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the byelaw, if not in conformity with the statute in order to give effect to the statutory provision the Rule or bye-law has to be ignored. The statutory provision has precedence and must be complied with." 27. The aforesaid principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 being is entitled to arrange his affairs by relying on the existing law and should not find 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 con ..... 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