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2011 (2) TMI 358 - AT - Service TaxPenalty - Rule 2(1)(d)(iv) of Service Tax Rules, 1994 for the period after 18.04.2006 i.e., after insertion of Section 66A of the Finance Act, 1994 - Respondent is a manufacturer of cotton yarn who export to various foreign countries - The service tax demand which is not being disputed has arisen in their capacity as recipients - It is also not in dispute that whatever service tax paid by them as recipient was available as credit and that they were eligible for rebate of duty on yarn cleared on payment of duty utilising such credit - Revenue held that the stay order of the Hon'ble High Court in relation to Rule 2(1)(d)(iv) when section 66A was not in force may not apply to the period when Section 66A is in force, the belief entertained by the respondent cannot be held other than bonafide especially in the context of Revenue neutrality as the entire tax paid by them as recipient was available to them as credit - The respondents have not disputed the tax liability primarily on the ground that whatever service tax paid by them was available to them as credit - Decided in favour of assessee.
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