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2015 (10) TMI 2228 - AT - Service TaxDisallowance of CENVAT credit on medical insurance services and demand of interest alleging delay in payment of service tax on transactions with Associated Enterprises prior to 10.5.2008 – Manpower Recruitment – Appellant contends that it had to obtain insurance cover for employees who are provided temporarily to customers and they qualify as input services and they have rightly availed credit and has paid interest upon the delayed payment after 10.5.2008 upto the date of payment. Held That:- Definition of input service during the relevant period covered every conceivable service used in the business of assessee - Disallowance of credit on medical insurance services cannot be sustained – Decsion made in case of Commissioner of Service Tax, Bangalore Vs. M/s Team Lease Services (P) Ltd. [2014 (4) TMI 948 - KARNATAKA HIGH COURT] followed. Transactions with associated enterprises - Held that:- The statutory provision for demanding service tax in respect of transactions between associated enterprises, immediately upon amendment, has been introduced only w.e.f. 10.5.08. 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. - Decision in the case of CESTAT in Sify Technologies Ltd. Vs. CCE [2010 (11) TMI 232 - CESTAT, CHENNAI] followed. No liability on part of appellants to pay interest on book adjustments made prior to 10.5.2008 as appellants have deposited interest applicable after 10.5.2008 – Impugned demand of interest of ₹ 3,25,360/- is not sustainable – Decided in favour of assessee.
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