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2019 (1) TMI 2028 - AT - Service TaxLevy of Service Tax - service rendered prior to 16.10.1998 i.e. prior to introduction of Service Tax on CA services - services rendered by the appellant in the capacity of sub contractor - denial of exemption of notification no. 59/98-ST for the period prior to 01/08/2002 - Interest and penalty. Demand of Service Tax of Rs. 12065/- on the service rendered prior to 16.10.1998 i.e. prior to introduction of Service Tax on CA services - HELD THAT:- The Service Tax is leviable on the date of provision of service, the CA service was not taxable at the time of provision of service, even though the payment was received subsequent to the introduction of Service Tax. Accordingly, the demand of Rs. 12,065/- is set aside. Demand of Service Tax Rs. 17,485/- in respect of services rendered by the appellant in the capacity of sub contractor - HELD THAT:- There was a circular dated 31.10.1996, according to which the sub contractor need not pay the Service Tax when the main contractor discharges the service tax on the gross value including the value of the service provided by the sub contractor. In view of the circular, the bonafide belief entertained by the appellant is correct. Therefore, the demand of Rs. 17,485/- is hit by limitation and the same is set aside only on time bar without going into the merit of the case. The demand of Service Tax of Rs. 88,625/- denying exemption of notification no. 59/98-ST for the period prior to 01/08/2002 - HELD THAT:- Demand of Rs. 86,625/- was raised on the service of management consultancy service which was admittedly exempted under notification 59/98-ST and by amendment notification 15/2002-ST. Though the exemption was withdrawn by inserting the explanation but that cannot be applied retrospectively. Therefore, during the relevant period before amendment dated 01/08/2002, the service provided by CA in respect of management consultancy services was exempted. Accordingly, the demand of Rs. 88,625/- is also set aside. Interest and penalty - HELD THAT:- Since, demand itself is not maintained, the penalty and interest are also not sustainable. Appeal allowed.
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