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May, 28th 2013
%                                      Judgment delivered on: 14.01.2013

+       ST.APPL. 76/2012

COMMISSIONER OF SERVICE TAX                                    ... Petitioner


PVT. LTD.                                                      ... Respondent
Advocates who appeared in this case:
For the Petitioner           : Mr Rahul Kaushik, Adv.
For the Respondent           : Mr M P Devnath, Mr Aditya Bhattacharya, Mr Tarun
                             Jain, Mr Bhuvnesh Satija and Mr Abhishek Anand,




        We have heard the learned counsel for the parties.

2.      Admit.

3.      With their consent this appeal shall be taken for disposal

straightaway. The question for determination is: -

        "Whether, in respect of the services provided prior to
        14.05.2003 but, in respect of which payments were received

ST. APPL.76 /2012                                                     Page 1 of 4
        on or after 14.05.2003 service tax was chargeable @ 5% or
        @8% which rate came into force on 14.05.2003?"
4.      The appellant is aggrieved by the order dated 16.03.2012 passed by

the Customs, Excise and Service Tax Appellate Tribunal in Service Tax

Appeal No.424/2008 where this question has been answered in favour of

the assessee and against the department.      The Tribunal came to the

conclusion that the rate of service tax would be 5% inasmuch as the

services had been provided prior to 14.05.2003. While doing so, the

Tribunal placed reliance on a decision of the Tribunal, West Zonal

Bench, Ahmadabad in the case of Reliance Industries Ltd. Vs.

Commissioner of Central Excise, Rajkot : 2008 (10) STR 243 (Tri-

Ahmd.). We find that the matter had travelled to the Gujarat High Court

and the Gujarat High Court, itself, in the case of Commissioner of

Central Excise & Customs Vs. Reliance Industries Ltd. : 2010 (19) STR

807 (Guj.) had affirmed the decision of the Ahmadabad Tribunal.

However, this fact had not been brought to the notice of the Tribunal in

the present case. In fact, the matter had travelled even up to the Supreme

Court wherein the Supreme Court did not enter into the question because

the same had become academic in that case. In other words, the Supreme

Court had not expressed any view on this issue. However, the view of the

ST. APPL.76 /2012                                               Page 2 of 4
Gujarat High Court is clear. The view of the Gujarat High Court is that

the effective rate of service tax would be based on the date on which the

service is provided and not the date of billing.

5.      The learned counsel for the appellant submitted that the view taken

by the Gujarat High Court is not binding on this Court and based upon

this submission he sought to place reliance on Rule 5B of the Service Tax

Rules, 1994. He also placed reliance on Rule 4(a)(i) of the Point of

Taxation Rules, 2011 as also Section 67A of the Finance Act, 1994.

6.      However, we find that none of these provisions are applicable in

the facts and circumstances of the present case as Rule 5B of the Service

Tax Rules, 1994 came into effect on 01.04.2011 and was out of the

statute books on 01.07.2012. Section 67A of the Finance Act, 1994, was

inserted in the said Act by virtue of the Finance Act, 2012 w.e.f.

28.05.2012. In the present case, the relevant period is April, 2003 to

September, 2003.       Therefore, none of the above provisions apply.

Moreover, even Rule 4(a)(i) of the Point of Taxation Rules 2011 is not

applicable because those Rules came into effect on 01.03.2011.

7.      In the absence of any Rules, we will have to examine as to what is

the taxable event. The taxable event as per the Finance Act, 1994 is the

ST. APPL.76 /2012                                                Page 3 of 4
providing of the taxable service. In the present case, we find that not only

were the services admittedly provided prior of 14.05.2003 but also the

bills have been raised prior to 14.05.2003. The only thing that happened

after 14.05.2003 was that the payments were received after that date.

That, in our view would not change the date on which the taxable event

had taken place. Since the taxable event in the present case took place

prior to 14.05.2003, the rate of tax applicable prior to that date would be

the one that would apply. In the present case, the rate of 5% would be

applicable and not the rate of 8%. Consequently, we answer the question

in favour of the respondent and against the appellant.

        The appeal is dismissed.

                                       BADAR DURREZ AHMED, J

                                       R.V.EASWAR, J
JANUARY 14, 2013

ST. APPL.76 /2012                                                Page 4 of 4
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