TMI Blog2008 (12) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... Date of Hearing:16-12-2008 Shri B.L. Narasimhan, Shri Hemant Bajaj, and Shri Vivek Sharma, Advocates for the appellant. Mrs. A.P. Tiwari, Jt. CDR Mr. Amit Jain, Mr. A.K.Madan, DRs for the respondent. [Order per : P. K. Das, Member (Judicial)] - Common issue is involved in these appeals and therefore, all are being taken up together for disposal. 2. The issue involved in these appeals is whether the Service Tax is payable/leviable on the amount of advance i.e. lumpsum payment received prior to 1.7.2003, (the date when Service Tax was levied on Commercial training or Coaching Centre), when the service was actually rendered after 1.7.03. 3. The relevant facts of the case, in brief, are that the appellants are engaged in providing coaching service. On 01.7.2003, Service Tax was introduced on Commercial Training or Coaching Centre . The appellants were registered with Central Excise department. It was found that the appellants collected the fees on the basis of the contracts, prior to 01.7.2003, when services were rendered from 01.7.2003. Show cause notices were issued proposing demand of tax on the value of taxable service received prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial training or Coaching centre from 1.7.03. She further submits that payment of Service Tax is linked with rendering of service. She also submits that in this case, admittedly, the appellant rendered the service after 1.7.03 and they were liable to pay service tax on the taxable value, even which was recovered by them prior to 1.7.03. She drew the attention of the Bench the various provisions of Finance Act and its Rules. She also filed Written Notes of argument with copy of case laws. 6. Heard both sides and perused the records. 7. For the purpose of proper appreciation of the case, the relevant provisions of the Finance Act, 1994 and its Rules, as it stood during the relevant period are reproduced below:- FINANCE ACT, 1994 FROM 1.7.2003 ONWARDS Section 65. Definition. - In this Chapter, unless the context otherwise requires, - XXX XXX XX (105) taxable service means any service provided, - (ZZC) to any person, by a commercial training or coaching centre in relation to commercial training or coaching; Charge of Service Tax. 66.(1) There shall be levied a tax (hereinafter referred to as the service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial training or coaching centre. The main contention of the learned Advocate is that the appellants collected the amount prior to 1.7.2003 and, therefore, they are not liable to pay service tax on the services rendered by them after 1.7.2003. We are unable to accept the contention of the appellants. It is to be noted that service tax is a value added tax. Excise duty is a tax on value addition on goods, service tax is a tax on value addition by rendering services. So, the provision of Service tax should be read in this context. Section 66 is the charging section. Section 66 provides that the tax shall be levied and collected in such manner as may be prescribed. In terms of Clause (86) of Section 65, prescribed means prescribed by rules made under this Chapter. On close reading of Section 66, it is seen that levy of service tax is linked to collection in such manner as may be prescribed. The liability of payment of tax as created under Section 66 would be paid on the value of taxable service charged by the service provider for rendering such service by him. On reading of the above provisions harmoniously, we find that liability for payment of tax for rendering on commercial t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, the main test is that the appellant rendered the service after 1.7.2003 and they are liable to pay tax irrespective of fact collection taxable value was prior to 1.7.2003. The learned Advocate relied upon the case of Reliance Industries Ltd. (supra), wherein it has been held that when the service tax is introduced for the first time on any service, in respect of services already rendered on dates prior to introduction of service tax, even if payments are received on a subsequent date, no tax shall be liable. In fact, this proposition is in favour of the Revenue, as in the present case service tax is introduced for the first time on any service, in respect of amounts already collected on the date prior to introduction of service tax, and service was rendered on subsequent dates, tax shall be payable. (ii) On perusal of various provisions of Act and Rules, as discussed above, we do not find any reason to treat service provider, who received value of taxable service in advance a separate 'class'. To our mind, it is apparent from the provisions that the payment of tax is linked with rendering of services irrespective of fact the amount was received in advance. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the above discussions, we find that subsequent amendment of provisions would not change the dimension of the appellant's case. (iii) The contention of the learned Advocate is that only from 9.7.2004 by insertion of Explanation to Rule 6(1), it is provided for bifurcation of value. We have already discussed that levy and payment of tax are provided in the Act itself. So, the machinery provisions as provided in Rule 6 cannot defeat the object of the Act. In addition to that, Rule 6(1) as it stood during the relevant period provides for payment of tax on the value of taxable service received during any calendar month/quarter. In the present case, the value of taxable service was received prior to that period, which is mere incidental to Rule. The value of taxable service was received in advance and tax is not payable, in our view, it is a rigorous construction of machinery provisions. It is well settled that charging sections are to be read strictly, machinery provisions would not be constructed in such rigorous manner. (iv) The learned Advocate stated that in the taxing statute, the levy and collection provision constitute an integral code, if the machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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