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2018 (7) TMI 92 - AT - Service TaxLiability of Service tax - Book adjustment was made on the technical know-how fees paid by appellant to the associate company - The department was of the view that after the amendment cit. 10/5/2008 brought forth in Section 67 of the Finance Act, 1994, the appellants are liable to pay the service tax on book adjustments made with regard to associate enterprises. Held that:- The period is from 1/1/2007 to 31/12/2007, the explanation (c) to Section 67 of the Finance Act, 1994 provided that in respect of associate enterprises, service tax is required to be paid by the person liable to pay service tax on book adjustments also. However, the said amendment is applicable only from 10/5/2008 prospectively - the demand of service tax in respect of royalty / technical know-how fees cannot sustain and requires to be set aside. Penalty - entire service tax paid before issuance of SCN - Consulting Engineering Service - Held that:- the entire liability was discharged much before the issuance of SCN - the penalty imposed is unwarranted in terms of sub-section (3) of Section 73 of the Finance Act, 1994 - Penalty set aside. Appeal allowed - decided in favor of appellant.
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