Service tax rate follows the date of service rendition, not receipt of payment, sustaining the dropped demand.

Service tax is chargeable with reference to the date of rendition of the service, not the date of receipt of payment; the applicable rate is therefore the rate in force when the service is performed. Applying that settled principle, the Tribunal sustained the order dropping the disputed demand and rejected the Revenue's challenge.

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Issues: Whether the applicable rate of service tax is to be determined on the date of rendering of the service or on the date of receipt of payment.

Analysis: The Tribunal followed the settled view that service tax is attracted by the rendition of service, and not by the receipt of consideration. The applicable rate therefore has to be the rate prevailing when the service is rendered, consistent with the binding judicial view relied upon in the order.

Conclusion: The rate of service tax was required to be applied with reference to the date of rendering of service, not the date of receipt of payment. The demand dropping the disputed amount was sustained and the Revenue's appeal failed.

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