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TMI Blog2023 (9) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... on of commercial complex service. During the scrutiny of S.T.-3 returns filed by the assessee under works contract service for the period ending in March 2008, it was found that the assessee had paid Service Tax at the rate of 2.06% on the consideration received for the services provided prior to 01.03.2008. With effect from 01.03.2008, the rate of Service Tax on works contract service had been enhanced from 2.06% to 4.12%. 1.2 The Department was of the view that the assessee having received the amount after 01.03.2008, was liable to pay Service Tax at the enhanced rate of 4.12%. 2. Show Cause Notice No. 60/2009 dated 20.03.2009 was issued proposing to demand the differential tax along with interest and for imposing penalties. 3. After d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Delhi in the case of Vistar Construction (P) Ltd. v. Union of India [2013 (31) S.T.R. 129 (Del.)] wherein the Hon'ble High Court had considered the above Circular issued by the Board and had placed reliance on the decision of the Hon'ble Supreme Court in the case of Association of Leasing and Financial Service Companies v. Union of India [2010 (20) S.T.R. 417 (S.C.)] to hold that the taxable event is the provision of service and therefore, as works contract services have been completed prior to 01.03.2008, the amount received after 01.03.2008 is not subject to levy at the enhanced rate of 4%. 6.2 The Ld. Counsel adverted to the Show Cause Notice and the Order-in-Original to assert the fact that the provision of service was completed pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I am directed to refer to letter C. No. ST/1/Misc/2007/Pt. 1, dated 16-4-2008 from Commissioner (Service Tax), Delhi and copy endorsed to Commissioner (Service Tax), CBEC seeking clarification on the applicable rate of service tax for the Works Contract service [Sec. 65(105)(zzzza)] where the payment for the said service provided or to be provided is received on or after 1-3-2008. 2. A person providing Works Contract service can opt to pay service tax under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. As per the composition scheme, the service provider was having an option to pay 2% of the gross amount charged for the works contract as service tax. However, the rate of 2% has been revised to 4% with effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Service Tax), CBEC, North Block, New Delhi (ii) Director General, Directorate General of Service Tax, 9th Floor, Piramal Chambers, Jijibhoy Lane, Lalbaug, Parel, Mumbai-400012 (iii) Commissioners of Service Tax, Ahmedabad/Bangalore/Chennai/ Delhi/Kolkata/Mumbai" 7. On going through the said instruction and particularly para 3 thereof it appears that the view of the respondents is that service tax becomes chargeable on receipt of payment for the service whether or not the services are performed. This view is clearly wrong. We say so because the Supreme Court in the case of Association of Leasing & Financial Service Companies v. UOI : 2010 (20) S.T.R. 417 (S.C.) has categorically held as under : "Thus, the impugned tax is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l.)] wherein we held that in the absence of any rules, we would have to examine as to what is the taxable event. In that context we had held that the taxable event as per the Finance Act, 1994 was the providing or rendition of the taxable services. This is exactly what the Supreme Court had held in Association of Leasing & Financial Service Companies (supra). 10. Therefore, the rate of tax applicable on the date on which the services were rendered would be the one that would be relevant and not the rate of tax on the date on which payments were received. The instruction dated 28-4-2008 which is contrary to the law declared by the Supreme Court is clearly invalid. In Commissioner of Central Excise, Bolpur v. Ratan Meltins & Wire Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also by way of an appeal as provided under the statute. However, we do not agree with this proposition inasmuch as the basis of the show cause notice as well as the adjudication order is the instruction dated 28-4-2008. Unless and until that instruction is set aside the statutory authorities would continue to apply that instruction and the petitioner would have no remedy before the said authorities. Since the instruction dated 28-4-2008 has been held by us to be invalid, the show cause notice pertaining to the subject matter indicated by us as also the adjudication order would also have to go and it is for this reason that we have entertained these writ petitions and allowed the same. 13. The decision relied upon the learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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