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2023 (9) TMI 1140 - AT - Service TaxLevy of Service tax - part amount/earnest amount - Point of taxation rules - HELD THAT:- As per Rule 4(b)(iii), the point of taxation would be the date of issuing of invoice, which in the instant case is October, 2012. It is also noted that as per section 67A of the Finance Act, 1994, the rate of service tax, the value of a taxable service shall be the rate or value in force or as applicable at the time when the taxable service has been provided or agreed to be provided. It is noted that the appellant and the service recipient had merely entered into a Memorandum of Understanding in March, 2012 for leasing of land, and advance amount was paid to the appellant. The service of provision of leased land was provided in October, 2012. It is also apparent that the invoices for the said provision of service were raised on 23.10.2012. The above two dates are crucial to determine the date of provision of service in the instant case, that too in terms of Rule 4 POTR. From said two dates, it is clear that the service was provided after change in effective rate of tax and the invoice also has been raised after the change in effective rate of tax, though the part payment of Rs 10,62,33,750/- was received before the change in effective rate of tax. Thus, the case of appellant gets squarely covered under Rule 4(b)(iii) POTR. In the given set of facts and applicability of Rule 4(b)(iii) POTR there remains no service tax liability on advance received by the assessee. Hence, the demands and penalties confirmed against the appellant are not sustainable. The impugned order cannot be upheld and is therefore set-aside - Appeal allowed.
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