TMI Blog2018 (5) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... uirements for payment of service tax by 5 th day of the following month namely, (i) that payment should be for value of taxable service to be provided and (ii) the actual receipt of the said payment, existed on 01.05.2006. Demand of interest - difference of opinion - Whether the impugned order is required to be upheld for the purpose of confirmation of demand of interest as held by Ld. Member (Technical) or the interest demand has to be set aside as barred by limitation, as held by Member (Judicial). - ST/622, 706/2009-CU[DB] - IO/ST/56-57/2017-CU[DB] - Dated:- 8-9-2017 - Mrs. Archana Wadhwa, Member (Judicial) And Mr. Devender Singh, Member (Technical) Sh. Sudeep Singh, Advocate for the Appellant(s) Sh. Atul Handa, A.R. for the Respondent(s) Per: Devender Singh Brief facts of the case are that the appellants had provided taxable service in the category of sale of space or time for advertisement to M/S Gujarat Ambuja Ltd. The aforesaid service is specified under Section 65(105)(ZZZm) of the Finance Act, 1994 as a service leviable to tax with effect from 01.05.06. In this regard, two agreements dt. 07.10.199 and 05.03.05 were entered into by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 7,47,467/- has already been deposited, which includes amounts deposited on monthly basis. He contended that they had computed their liability to service tax on pro-rata basis as informed to them by the investigating officer in his letter dt. 17.05.2007. A copy of the letter was also placed on record. The -investigating officer had worked out the amount for May, 2006 to April, 2007 as ₹ 2,22,714/- and further calculated the amount for November, 2007 which was worked out to ₹ 72,679/- and these two amounts had been deposited on 19.10.2007 and 20.11.07. From December, 2007 onwards, they had been depositing their liability regularly and had deposited ₹ 3,56,933/- upto March, 2008. He contended that they had deposited the interest as per the letter cit. 17.05.07 of the Department. There was thus no justification for asking interest on lump sum payment of service tax. He also invited attention to the Board Circular dt. 05.11.03 in which it was mentioned that the value of service tax received in advance for a service becoming taxable subsequently, service tax has to be paid attributable to relevant month/quarter on pro-rata basis. He also contended that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utable to the service provided in a month/quarter as and when it is received. Thus, Rule 6(1) cannot be read in isolation, When read along with the provisions of the Act, it becomes clear that where the value of taxable service has been received in advance for a service which became taxable subsequently, service tax has to be paid on the value of service attributable to the relevant month/quarter which may be worked out on pro-rata basis. 14. We find that in terms of Rule 6 of Service Tax Rules 1994, the service tax was required to be paid to the credit of the Central Government by the 5th of the month immediately following the calendar month in which the payments were received towards the value of taxable services (emphasis supplied). Rule 6 provides for payment of service tax on taxable services on receipt of payment of the value of taxable services, which may be after the completion of taxable service, during the course of providing the taxable service or in advance before the provisioning of taxable service. In the case of appellant, subject services being provided by them became taxable from 01.05.2006 onwards and on that day they were already in receipt of payment in adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer to pay monthly instalments of service tax along with interest. Besides the service tax on impugned service, had been newly introduced at that time and the appellants had acted very much in line with the advice given by the investigating officer vide letter dt. 17.05.07. In these circumstances, suppression cannot be alleged. We also find that in the unique circumstances of the case where appellants were acting in line with instructions of the Department from the beginning and there was change in the stand of the Department, benefit of Section 80 would be admissible to the appellants. Since, we have allowed the benefit of Section 80 of the Finance Act to the appellant, the Revenue's appeal No. ST/622/2009 against order of Commissioner's (Appeals) dropping the penalty under Section 76 is liable to be dismissed. 17. In view of the above, the demand of ₹ 8,33,340/- along with interest is upheld. Penalties imposed are set aside by allowing the benefit of Section 80 of the Finance Act 1994. 18. In result, (i) appeal No. ST/ 706/09 is disposed of in above terms; (ii) Revenue's appeal No. ST/622/09 is rejected. (Order pronounced in the Court on) Devender s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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