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2018 (9) TMI 1658 - AT - Service TaxAscertainment of rate of Service Tax - taxable event - point of taxation rules - demand of differential service tax and interest under Section 73(1) and 75 of the Finance Act - case of respondent is that the rate of tax is the rate in force on the date of providing service and that the respondent had correctly paid the service tax - whether the appellant is liable to discharge service tax @2% or 4% on the service charges realized during the month of March, 2008? Held that - An identical issue has been decided by this very Bench of the Tribunal in the case of Commissioner of Service Tax, Chennai Vs. M/s. Consolidated Construction Consortium Ltd. 2018 (2) TMI 480 - CESTAT CHENNAI , where reliance placed on Hon ble High Court of Gujarat in the case of Commissioner of Central Excise Vs. Schott Glass India Pvt. Ltd. 2009 (1) TMI 45 - HIGH COURT OF GUJARAT has held that taxable event is the time of rendering the taxable service and not realization of payment thereof. Appeal dismissed - decided against Revenue.
Issues:
1. Whether the appellant is liable to discharge service tax at 2% or 4% on the service charges realized during March 2008. Detailed Analysis: The case involved a dispute regarding the rate of service tax applicable to a works contract service provided by the respondent. The appellant contended that the respondents should pay service tax at the revised rate of 4% on the taxable value realized during March 2008, as per Notification No. 7/2008. The Commissioner (Appeals) had previously held that the rate of tax should be the one applicable at the time of providing the service, not at the time of payment. The respondent argued that they had paid at 2.06% for services rendered before March 2008, believing the rate applied at the time of service provision. They cited relevant case laws to support their stance. The Tribunal, after considering the arguments from both sides and examining the precedents, found that the issue at hand had been previously addressed by the same Bench in a similar case. Referring to the judgment in Commissioner of Service Tax, Chennai Vs. M/s. Consolidated Construction Consortium Ltd., the Tribunal noted that the Commissioner (Appeals) had correctly relied on legal principles. The Tribunal also highlighted the decision of the Hon'ble Delhi High Court and the Hon'ble High Court of Gujarat, emphasizing that the taxable event for service tax is the time of rendering the service, not the payment realization. Based on this analysis, the Tribunal concluded that the decision of the Commissioner (Appeals) was just and proper, dismissing the appeal filed by the Revenue. In summary, the Tribunal upheld the Commissioner (Appeals)'s decision, stating that the rate of service tax should be based on the rate applicable at the time of providing the service, not at the time of payment realization. The Tribunal found no merit in the Revenue's appeal and dismissed it accordingly.
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