Union Of India vs M/S Intercontinental Consultants And ...

In all these appeals, legal issue that needs determination is almost identical, though there may be little variation on facts. This difference pertains to the nature of services provided by the respondents/assessees who are all covered by the service tax. The fringe diferences in the nature of services, however, nature of differences, however, has no impact on the final outcome.

2) All the assessees are paying service tax. The services which these assessees are rendering broadly fall in the following four Civil Appeal No. 2013 of 2014 with Ors. Page 2 of 44 categories:

4) This judgment was rendered by the High court in the writ petition filed by M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. out of which Civil Appeal No. 2013 of 2014 arises. Therefore, for our purpose, it would suffice to advert to the facts of this appeal and take note of the reasons which have prevailed with the High Court in arriving at this conclusion.

5) The assessee M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. is a provider of consulting engineering services. It specialises in highways, structures, airports, urban and rural infrastructural projects and is engaged in various road projects outside and inside India. In the course of the carrying on of its business, the petitioner rendered consultancy services in respect of highway projects to the National Highway Authority of India (NHAI). The petitioner receives payments not only for its service but is also reimbursed expenses incurred by it such as air travel, hotel stay, etc. It was paying service tax in respect of amounts received by it for services rendered to its clients. It was not paying any service tax in respect of the expenses incurred by it, which Civil Appeal No. 2013 of 2014 with Ors. Page 4 of 44 was reimbursed by the clients. On 19.10.2007, the Superintendent (Audit) Group II (Service Tax), New Delhi issued a letter to the petitioner on the subject “service tax audit for the financial year 2002-03 to 2006-07. In this letter, it was mentioned by the appellant that service tax was liable to be charged on the gross value including reimbursable and out of pocket expenses like travelling, lodging and boarding etc. and the respondent was directed to deposit the due service tax along with interest @13% under Sections 73 and 75 respectively of the Act. In response, the respondent provided month-wise detail of the professional income as well as reimbursable out of pocket expenses for the period mentioned in the aforesaid letter. Thereafter, 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.

Explanation 2 – Where the gross amount charged by a service provider is inclusive of service tax payable, the value of taxable service shall be such amount as with the addition of tax payable, is equal to the gross amount charged.

“A. “Consulting Engineering Services” – Assessee were providing consulting services to M/s. NHAI for highway projects. They were paying Service Tax on remuneration only instead of the gross value charged from the client.

C. Custom House Agent covered by head “Clearing and Forwarding Agent” prior to 18.04.2006. Procedure of raising two Civil Appeal No. 2013 of 2014 with Ors. Page 32 of 44 sets of invoices for reimbursement of various expenses and for service/agency charged separately started after introduction of Service Tax on CHA’s (wef 15.06.1997) in view of Circular dated 06.09.1997.

3. 4340-4341/2014 Period: 01.04.2004 to Customs Examination 31.03.2008 Charges, Misc.

Commissioner(Appeals) documentation set aside the demand charges.

D. Site Formation and clearance, excavation and earth moving and demolition services: Assessees conduct drilling, blasting, excavation, loading, transport etc. of overburdened at open cast Mines. Issue is whether value of Goods/material service u/s. 65(97a), is to be included in ‘Gross Amount’ u/s 67 of Finance Act for the purpose of S.T. The impugned orders follow the decisions in Bhayana Builder Civil Appeal No. 2013 of 2014 with Ors. Page 35 of 44 Intercontinental.

5. 4975/2016 Period: October 2008 to Value of explosives and November 2008 diesel oil supplied free CCE & ST v. of cost by service Gulf Oil Demand: Rs. recipient.

50,54,746/-

6. 5453/2016 Period: Mar’08 to Mar’ Value of explosives and 2012 diesel oil supplied free CCE & ST v. of cost Civil Appeal No. 2013 of 2014 with Ors. Page 36 of 44 AMR India Demand:

7. 10223- Period: Apr’09 to Jan’10 Value of diesel oil 10224/2017 & February 2010 to supplied free of cost September 2010 CCE & ST v.

30) As a result, we do not find any merit in any of those appeals which are accordingly dismissed.

CIVIL APPEAL NO. 6865 OF 2014, CIVIL APPEAL NO. 6864 OF 2014, CIVIL APPEAL NO. 4975 OF 2016, CIVIL APPEAL NO. 5130 OF 2016 AND CIVIL APPEAL NOS. 4536-4537 OF 2016

31) In the aforesaid appeals, the issue is as to whether the value of free supplies of diesel and explosives in respect of the service of ‘Site Formation and Clearance Service’ can be included for the purpose of assessment to service tax under Section 67 of the Act. These assessees had not availed the benefit of aforesaid Notifications Nos. 15/2004 and 4/2005. Therefore, the issue has to be adjudged simply by referring to Section 67 of the Act. We have already held above that the value of such material which is supplied free by the service recipient cannot be treated as ‘gross amount charged’ and that is not the ‘consideration’ for rendering the services. Therefore, value of free supplies of diesel and Civil Appeal No. 2013 of 2014 with Ors. Page 43 of 44 explosives would not warrant inclusion while arriving at the gross amount charged on its service tax is to be paid. Therefore, all these appeals are also dismissed.

TRANSFER PETITION (CIVIL) NOS. 1043-1045 OF 2017 TRANSFER PETITION (CIVIL) NOS. 1932-1934 OF 2017

32) These transfer petitions are allowed and the writ petitions mentioned in the prayer clause, which are pending before the High Court of Madras, are transferred to this Court.

33) The transferred writs are also disposed of in terms of the judgment rendered above in Civil Appeal No. 2013 of 2014 and other connected matters.

MARCH 07, 2018.

Civil Appeal No. 2013 of 2014 with Ors. Page 44 of 44