Page 132 - GSTL_7th May 2020_Vol 36_Part 1

90 GST LAW TIMES [ Vol. 36
ty below has stood merged in the order of the Supreme Court re-
jecting the special leave petition or that the order of the Supreme
Court is the only order binding as res judicata in subsequent pro-
ceedings between the parties.
(vi) Once leave to appeal has been granted and appellate jurisdiction of
Supreme Court has been invoked the order passed in appeal would attract
the doctrine of merger; the order may be of reversal, modification or mere-
ly affirmation.
(vii) On an appeal having been preferred or a petition seeking leave to
appeal having been converted into an appeal before the Supreme Court
the jurisdiction of High Court to entertain a review petition is lost there-
after as provided by sub-rule (1) of Rule 1 of Order 47 CPC.”
(c) Once we hold that law laid down in Kunhayammed is to be fol-
lowed, it will not make any difference whether the review petition
was filed before the filing of special leave petition or was filed after
the dismissal of special leave petition. Such a situation is covered in
para 37 of Kunhayammed case.”
(emphasis supplied)
34. The second circular dated 3 September, 2009 also could not have been
relied upon by the Principal Commissioner in the facts and circumstances of this
case, as the judgment of the High Court was delivered under the erstwhile Cen-
tral Excise Rule and the matter related to the existing Rule 14 of the Cenvat Cred-
it Rules, 2004.
35. The second issue that arises for consideration is as to whether the
reimbursements received by the appellant from the customers towards transpor-
tation charges, railway freight can be included in the taxable value. The Principal
Commissioner held that for the period from 1 June, 2007 to 31 March, 2009, the
activity would be in relation to mining and though the appellant had deposited
service tax under this category but had not included the reimbursement charges
in the taxable value. It is this demand made for reimbursement amount that has
been confirmed in the impugned order.
36. The submission of Learned Counsel for the appellants is that the
amount received towards reimbursement cannot be treated as a consideration for
provision of service in terms of Section 67 of the Act.
37. Section 67 of the Act was considered and explained by the Supreme
Court in Union of India and Others v. Intercontinental Consultants and Technocrats
Private Limited - (2018) 4 SCC 669 = 2018 (10) G.S.T.L. 401 (S.C.). The appellant
therein was providing consulting engineering services. It received payment not
only for the services provided by it but was also reimbursed for the expenses
incurred by it on air travel, hotel stay, etc. It paid Service Tax on the amount re-
ceived by it for services rendered to its clients but did not pay any Service Tax in
respect of expenses incurred by it which were reimbursed by the clients. A show
cause notice was issued to it to explain why Service Tax should not be charged
on the gross value including reimbursable and out of pocket expenses. The pro-
visions of Rule 5(1) of the Rules were resorted to for this purpose by the Depart-
ment.
38. A writ petition was filed before the High Court challenging the vires
of Rule 5 as being unconstitutional as well as ultra vires the provisions of Sections
66 and 67 of the Act. The High Court of Delhi accepted the said contention and
declared Rule 5 to be ultra vires the provisions of Sections 66 and 67 of the Act.
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