Service tax rate change dispute remanded for fresh examination of evidence on when services were actually provided.

Service tax liability at the higher rate after the 18-4-2006 change depended on whether the services were actually provided before that date and whether the supporting invoices or bills proved that fact. The demand had been sustained because the appellant had not established that the bills were raised before the rate change, but the appellant maintained that the services themselves were rendered earlier and that evidence existed. As the dispute turned on fresh examination of factual proof regarding the timing of service provision, the impugned order was set aside and the matter remanded to the Commissioner (Appeals) for reconsideration after taking the evidence on record.

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Issues: Whether the appellant was liable to pay service tax at the higher rate after the rate change with effect from 18-4-2006, and whether the matter required reconsideration in light of evidence that the services were provided before that date.

Analysis: The demand had been confirmed on the footing that the appellant had not established that the invoices or bills were raised before 18-4-2006. The appellant asserted that the services themselves were rendered prior to the rate change and that supporting bills were available. As the controversy turned on factual proof regarding the date of provision of services and the supporting evidence had to be examined afresh, the matter was sent back for reconsideration after taking the evidence on record.

Outcome: The impugned order was set aside and the matter was remanded to the Commissioner (Appeals) for fresh decision.

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