2018 (9) TMI 1137 - AT - Service Tax

Jurisdiction - Whether the explanation to Rule 6 (1) of the Service Tax Rules, 1994, which was introduced with effect from 10.05.2008, would be retrospective or otherwise? - Held that - Identical issue decided in the case of The Principal Commissioner of GST, Delhi Vs. McDonalds India Pvt. Ltd. 2017 (10) TMI 514 - DELHI HIGH COURT , where it was held that As per Rule 6, it is the date when the amount is credited/debited that is relevant and not the fact that the amount remains in the books. Any contrary interpretation would result in the provision being made retrospective, which was not the intention - appeal disposed off.

Summary

Issues:
1. Retrospective application of the explanation to Rule 6(1) of the Service Tax Rules, 1994.
2. Service tax liability on transactions post introduction of the amendment.
3. Interpretation of judgments regarding retrospective application of the amendment.
4. Miscellaneous application for change of cause-title of the respondent.

The judgment by the Appellate Tribunal CESTAT Chennai revolves around the retrospective application of the explanation to Rule 6(1) of the Service Tax Rules, 1994, introduced on 10.05.2008. The dispute involved whether the appellant should discharge service tax liability on an amount payable to their holding company towards import of technical services as on the aforementioned date. The department demanded payment with interest and imposed a penalty based on this interpretation. The tribunal, after hearing both sides, considered settled judgments indicating that the said amendment operates retrospectively. The tribunal specifically referenced the judgment of the Hon'ble High Court of Delhi in a similar case, supporting the appellant's position. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential reliefs.

The tribunal found the ratio established by the Hon'ble High Court of Delhi applicable to the facts of this appeal, leading to the decision to set aside the impugned order. Additionally, a miscellaneous application was filed by the department for a change in the cause-title of the respondent due to a jurisdiction and address change. The jurisdiction and address were updated to The Commissioner of GST & Central Excise, Chennai South Commissionerate. As a result, the miscellaneous application was allowed, and the appeal was disposed of accordingly, including the change of cause title for the respondent.

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