2019 (7) TMI 152 - AT - Service Tax

Rate of service tax - services to Global Energy Ltd. as liaisoning for power purchases - appellant provided the said services during the period 2008-2009 and raised the bill for the said services on 31.03.2009 - N/N. 8/2009-ST dated 24.02.2009 - HELD THAT - Admittedly, the appellant raised a consolidated one time bill on 31.03.2009, when the rate of service tax was 10%. The adjudicating authority has also accepted the fact that there is no dispute about the date of payment of tax. As such, it is seen that the appellants were to pay the service tax only after raising the bill on 31.03.2009, when the rate of duty was admittedly 10% - Any reference to the period when the services were provided, by the lower authorities, is without any authority of law. There is no provision in the service tax law referring to the applicability of rates of service tax depending upon the period of the services - the appellant is required to pay the service tax at the rate which is effective as on date of payment of the same. Inasmuch as the effective rate on the date for payment of the same was 10%, the appellant has rightly discharged their liability at 10%. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Rate of service tax applicable for services provided during a specific period.

Analysis:
The case involved a dispute regarding the rate of service tax applicable to services provided by the appellant to a company for power purchases during the period 2008-2009. The appellant raised a consolidated bill on 31.03.2009 and discharged their service tax liability at the rate of 10% as per Notification No.8/2009-ST dated 24.02.2009, even though the rate was 12% during the period in question. The Revenue initiated proceedings against the appellant, claiming the higher rate of tax based on the period of service provision. The original adjudicating authority confirmed the demand, imposing a penalty and interest. The appellate authority upheld the decision, leading to the present appeal.

The Tribunal carefully considered the submissions and reviewed the facts. It noted that the appellant raised the bill on 31.03.2009 when the rate of service tax was 10%. The adjudicating authority acknowledged that there was no dispute regarding the date of payment of tax. The Tribunal emphasized that the service tax liability should be determined based on the rate effective at the time of payment, not the period of service provision. It highlighted that there is no provision in the service tax law linking rates to the period of services. Therefore, the appellant correctly discharged their liability at the prevailing rate of 10% on the payment date.

Based on the above analysis, the Tribunal set aside the impugned order, allowing the appeal and providing consequential relief to the appellant. The judgment clarified that the service tax rate applicable is the one in effect at the time of payment, not the period during which the services were provided.