TMI Blog2008 (5) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-5-2003 when the rate of service tax was 5% - held that in respect of hire purchase contract, the rate of tax applicable is the rate prevailing on the day the contract is entered into - higher rate is not applicable for contract entered prior to the hike - demand of differential amount applying the higher rate not justified - ST/216/2006 - 566/2008 - Dated:- 8-5-2008 - Dr. S. L. Peeran, Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to 8 per cent with effect from 14-5-2003. The point at issue is whether the revised rate of 8 per cent would be applicable even to those cases where the hire purchase agreement was entered prior to 14-5-2003. The department has taken the view that even though the Hire Purchase agreement was entered prior to the enhancement of the rate of Service Tax i.e., prior to 14-5-2003, when the monthly ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract is entered into. The higher rate is not applicable for contract entered prior to the hike. The ratio of the cited case is squarely applicable to the present case. Respectfully, following the ratio of the above ruling, we allow the appeal. In this connection, the finding rendered in the case of Art Leasing Ltd (supra) in para 5 is reproduced herein below. 5. The Banking and Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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