Service tax rate change follows the date of service and billing, not later receipt of payment; suppression not established.

Where no specific transitional rule governed a change in service tax rate, the taxable event was the rendition of the service, so the rate in force when the service was provided and invoices were raised applied. Receipt of consideration after the rate change did not shift the tax incidence, and the enhanced rate was therefore inapplicable. On limitation, an interpretational dispute based on facts already available with the Department could not support suppression, so the demand was also time-barred. The confirmed demands were set aside and the appeal succeeded with consequential relief.

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Issues: (i) Whether service tax was payable at the enhanced rate on the basis of receipt of consideration after the rate change, where the services were rendered and invoices raised earlier. (ii) Whether the demand was barred by limitation and suppression could be invoked in the circumstances.

Issue (i): Whether service tax was payable at the enhanced rate on the basis of receipt of consideration after the rate change, where the services were rendered and invoices raised earlier.

Analysis: In the absence of specific rules governing a change in service tax rate for the relevant period, the taxable event was the provision of the taxable service. Where the services had been provided and bills had been raised before the rate change, subsequent receipt of payment did not alter the date of the taxable event. The applicable rate was therefore the rate in force when the services were rendered and invoices issued.

Conclusion: The enhanced rate was not applicable and the demand on merits failed.

Issue (ii): Whether the demand was barred by limitation and suppression could be invoked in the circumstances.

Analysis: The demand related to a period where the issue was one of interpretation in the absence of specific rules. The notice was issued long after the relevant transactions and the necessary particulars were already available with the Department. On those facts, suppression could not be fastened on the assessee and the demand was liable to fail on limitation as well.

Conclusion: The demand was time-barred and the allegation of suppression was unsustainable.

Final Conclusion: The confirmed demands were set aside and the appeal succeeded in full with consequential relief as permissible in law.

Ratio Decidendi: In the absence of a specific transitional rule, the taxable event for service tax is the rendition of the taxable service, so the rate applicable is the one in force when the service is provided and billed, and an interpretational dispute with disclosed facts does not justify invoking suppression to defeat limitation.

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