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2014 (7) TMI 155 - AT - Service TaxRate of service tax - Hire purchase - Demand on lease agreement entered into before the levy of service tax - Held that:- Banking and Financial Services came under The Service Tax net w.e.f. 16.07.2001. At that time, CBEC issued clarification to the effect that in respect of Hire Purchase Contracts entered prior to 16.07.2001 and installments of which were received after 16.07.2001, there is no Service Tax liability. In our view, the same logic is applicable to the present case also. When the Hire purchase contract is entered, the taxable event occurs. We agree with the appellants that the installment payments are only obligations of the hirer. The finding of the Commissioner(Appeals) that the appellant continues to provide service during the payment of installments is not correct. Therefore, the rate of Service Tax will be the rate prevailing on the date on which the contract is entered into. Consequently, the demand of differential amount applying the higher rate, which came into effect from 14.05.2003, will not be applicable in respect of the contacts entered prior to that date - Following decision of Art Leasing Ltd. vs. CCE [2007 (6) TMI 217 - CESTAT, BANGALORE] - Decided in favour of assessee.
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