TMI Blog2010 (11) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of its publication - The amendment to Section 67 is a substantive one and will be applicable only from the date of its introduction and not retrospectively, eventhough the Explanation uses the expression “for removal of doubt" - The decision of the Tribunal in CCE, Pune v. Bajaj Auto Ltd.relied upon by the lower appellate authority to conclude that the amendment, which is clarificatory in nature, is retrospective, is not applicable in the facts of the present case, as the Tribunal held in that case that clarificatory amendments are retrospective only when they did not materially change, the existing provisions - In the instant case, there was no provision either in Section 67 of the Finance Act or Rule 6 of the Service Tax Rules to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax on account of associated enterprise transactions vide two challans dt. 5-9-08 under Leased Circuit Services category based on the service invoices issued for the quarter ending 31-3-08 and 30-6-08. An amount of Rs. 24,19,303/- was paid towards interest on 5-9-08 for delayed payment of service tax on the above invoices, calculating interest @ 13%, considering the due date of payment as 31-3-08 for the bills raised for the quarter ending 31-3-08 and 6-7-08 as the due date of payment for the invoices raised for the quarter ending 30-6-08 and had calculated the delay in payment of tax in terms of months instead of number of days delayed, resulting in excess/short payment of interest. Claim for refund of Rs. 8,44,029/- being inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t claimed and the amount actually eligible); the Asst. Commissioner adjudicated the notice by rejecting the claim for refund of Rs. 6,21,918/- and ordering refund of Rs. 2,22,111/- only. This order was upheld by the Commissioner (Appeals); hence this appeal before the Tribunal. 3. I have heard both sides. Section 67 of the Finance Act, 1994 defines value of taxable service . The Section is reproduced herein below :- SECTION 67. Valuation of taxable services for charging service tax. (1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall, (i) in a case where the provision of service is for a consideration in money, be the gross amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and [book adjustment, and any amount credited or debited, as the case may be. to any account whether called Suspense account or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise. (emphasis supplied) 4. By the amendment introduced in the Finance Act, 2008 w.e.f. 10-5-08, service tax in respect of transactions between associate enterprises was required to be paid as soon as the transactions were entered in the books of account instead of waiting for the actual remittances. The objective of the amendment has been set out in C.B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this provision is restricted to transaction between associated enterprises. This provision shall also apply to service tax payable under reverse charge method (Section 66A) as taxable services received from associated enterprises. For this purpose section 67 and rule 6(1) are being amended. 6.4 The term associated enterprise has the same meaning as assigned to it-in section 92A of the Income Tax Act, 1961. It is a relative concept i.e. an enterprise is an associated enterprise when it is viewed in relation to other enterprises. This concept is used in the Income Tax Act for applying transfer pricing provisions. An enterprise which participates, directly or indirectly, or through one or more intermediaries, in the management or control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The Legislative intention behind the amendments was explained by the Board as for plugging avoidance of tax on the ground of non-realization of money from associated enterprises and the intention of the Legislature in bringing the amendments is to introduce a new provision and not to remove any doubts in the existing provision. It is not, nor can it be, anybody s case that Explanation shall always take effect retrospectively. In the case of Commissioner of Customs v. Skycell Communications Ltd. [2008 (232) E.L.T. 434], the Larger Bench of the Tribunal has held that Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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