DUTTMENON DUNMORRSETT Vs. UNION OF INDIA & ORS

JUDGEMENT

(1.) The petitioner has questioned a demand of '38,30,003/- made by the learned Assistant Commissioner of Service Tax consequent upon an adjudication, resulting in the order in original dated 31.03.2017. The petitioner, a law firm submits that the amounts paid to senior counsel for services rendered to third party clients in the form of representation in Courts etc., cannot be subjected to service tax levy under the Finance Act, 1994, in its hands. In this case, the impugned order, i.e. the order in original dated 31.03.2017 of the learned Assistant Commissioner relied upon Rule 5 of the Service Tax (Determination of Value) Rules, 2006 (hereafter referred to as 'the Rules') to hold that the reimbursement, by its clients to the petitioner, had to be included in the value of services that was subjected to levy.

(2.) The levy in this case was, for the first time, introduced on 01.09.2009 by insertion of Section 65(105)(zzzzm) of the Finance Act, 1994 by way of substitution. The two show cause notices issued to the petitioner cover the period from 01.09.2009 to 30.06.201 The petitioner relies upon a Division Bench ruling of this Court in Intercontinental Consultants & Technocrats Pvt. Ltd. v. Union of India, (2013) 29 STR 9 . In this judgment, the Court had declared that Rule 5(1) of the Rules to the extent it mandates inclusion of reimbursements to the assessee, in respect of payments made to third parties cannot be subjected to service tax levy. The judgment was later affirmed by the Supreme Court in Union of India v. Intercontinental Consultants Pvt. Ltd, (2018) 4 SCC 669 (CA 2013/2014 and connected cases). This Court had in its judgment in Intercontinental Consultants & Technocrats Pvt. Ltd. , held as follows:

(3.) These findings were affirmed by the Supreme Court, in the following terms: