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TMI Blog2015 (10) TMI 2228X X X X Extracts X X X X X X X X Extracts X X X X ..... in providing services of manpower recruitment and are registered for various services. They are also availing Cenvat credit. It was observed that for the period 2007-08 to 2010-2011 the appellant wrongly availed credit on medical insurance services of employees as these services according to the department did not qualify as input services. The second allegation is with regard to delay in payment of service tax. The appellant was receiving services from outside India and was liable to pay service tax under Section 66A of Finance Act, 1994. During the Financial Year 2006-2007 and 2007-08, the appellant received services from it s overseas affiliate and made entries in the books of account. Service tax pertaining to these book entries was pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to obtain insurance cover for the employees who are provided temporarily to customers. Further medical insurance was provided to the appellant s own employees. That these services being an important part of the business of the appellant, they qualify as input services, and that appellant has rightly availed the credit. To fortify his arguments the learned Counsel relied upon the judgment in Commissioner of Service Tax, Bangalore Vs. M/s Team Lease Services (P) Ltd. 2014-TIOL-510-HC-KAR-ST. 4. The credit is seen denied in the impugned order observing that medical insurance service has no direct nexus with the output services. In a catena of decisions it has been held that, the definition of input service, as it stood during the relevant pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (c) gross amount charged includes payment by cheque, credit card, deduction from amount and any form of payment by issue of credit notes or debit notes and book adjustment, and any amount credited or debited, as the case may be, to any account, whether called suspense account or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise. Explanation inserted in Rule 6(1) of Service Tax Rules is as below: Explanation For the removal or doubts, it is hereby declared that where the transaction of taxable service is with any associated enterprise, any payment received towards the value of taxable service, in such case shall include any am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment has not proposed to demand service tax from various dated in 2006-07 to 2007-08 itself when the book entries were made in the books of accounts of the assessee. I find that since the provisions have been clarified on 10.05.2008, the department has treated the entries made by them in 2006-07 to 2007-08 as having been made on 10.5.2008 and since the assessee is a person other than individual/proprietary firm/partnership firm, they become liable to pay the service tax on 05.06.2008 i.e. by 5th of the calendar month immediately following the calendar month in which the payment are made towards the value of taxable services. The assessee s contention that the department is applying the provisions with retrospective effect is, therefore, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prior to 10.5.08, neither the Finance Act, 1994 not the Service Tax Rules, 1994 contain any provision enabling demand of service tax prior to the realization of taxable services, in any circumstances. This being so, it is not legally permissible to give retrospective effect to the Explanation inserted in Rule 6 of the Service Tax Rules. The Legislative intention behind the amendments was explained by the Board as for plugging avoidance of tax on the ground of non-realization of money from associated enterprises and the intention of the Legislature in bringing the amendments is to introduce a new provision and not to remove any doubts in the existing provision. It is not, nor can it be, anybody s case, that Explanation shall always take effe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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