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TMI Blog2018 (7) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/2007 book adjustments has been made towards royalty payable to their associate company, M/s.Mitsuba Corporation, Japan. It was also noticed that M/s.Mitsuba Corporation, Japan had rendered technical assistance to appellant and such service falls under Consulting Engineering Service. Book adjustment was made on the technical know-how fees paid by appellant to the associate company. The department was of the view that after the amendment cit. 10/5/2008 brought forth in Section 67 of the Finance Act, 1994, the appellants are liable to pay the service tax on book adjustments made with regard to associate enterprises. Show Cause Notice was issued proposing to demand the service tax alongwith interest and also for imposing penalties. After due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard both sides. 5. The period is from 1/1/2007 to 31/12/2007, the explanation (c) to Section 67 of the Finance Act, 1994 provided that in respect of associate enterprises, service tax is required to be paid by the person liable to pay service tax on book adjustments also. However, the said amendment is applicable only from 10/5/2008 prospectively. The issue stands covered by the decision in the case of Sify Technologies Ltd. vs Commissioner of C.Ex. & S.T., LTU, Chennai, (supra). The relevant portion is copied as under:- 5. Pursuant to the above amendment, following Explanation was inserted in Rule 6 of the Service Tax Rules, 1994, w.e.f. 10-5-08:- "Explanation. - For the removal of doubts, it is hereby declared that where the transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective. In the case of CCE, Shillong v. Vinay Cement Ltd. [1999 (114) E.L.T. 753], the Tribunal has held that since a notification inserting an Explanation has specifically stated that it would be effective from the date of its publication, it takes effect only from that date. In the instant case also, Notification No. 19/08 introducing Explanation to Rule 6 of the Service Tax Rules, 1994 contains a provision that it shall be effective only from the date of its publication. The amendment to Section 67 is a substantive one and will be applicable only from the date of its introduction and not retrospectively, eventhough the Explanation uses the expression "for removal of doubts". The decision of the Tribunal in CCE, Pune v. Bajaj Auto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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