2017 (10) TMI 514

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....ication, the delay in filing is condoned. The application is allowed. SERTA No. 7/2017 & CM No. 36005/2017 (stay) 3. This is an appeal by the Service Tax Department through the Principal Commissioner of GST under Section 35 of the Central Excise Act, 1944 ("CE Act") read with Section 83 of the Finance Act ("FA"), 1994 against an order dated 16th December 2016 passed by the Customs, Excise & Service Tax Appellate Tribunal ("CESTAT") in Appeal No. ST/60163/2013 whereby the appeal of the Respondent-Assessee was allowed and the order in appeal dated 25th July, 2013 of the Commissioner (Appeals) was set aside. 4. The Respondent-Assessee is a subsidiary of McDonald's Corporation, USA ("the holding Company") which also happens to be its A....

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....") by Notification No. 19/2008/ST dated 10th May 2008 as under: "Explanation- For the removal of doubts, it is hereby declared that where the transaction of taxable service is with any associate enterprise, any payment received towards the value of taxable service, in such case shall include, any amount credited or debited, whether called 'suspense account" or by any other name, in the books of account of a person liable to pay service tax." 7. As a consequence of the above amendments, service tax was required to be paid on taxable service provided to AEs even where the consideration of such tax and services had not actually been received but had been shown in books of accounts as "outstanding". 8. The question that arises in t....

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....e ST Rules only made the position even more explicit particularly since it opens with the words "for the removal of doubts". He also sought to urge that since the amounts are being carried forward even post the amendment to Section 67 and Rule 6, the Assessee was liable to pay service tax. 11. The Court finds that a similarly worded explanation to Section 65 (19) of the FA 1994, in the context of service tax payable on rendering service of promotion and marketing of lottery tickets, was held by the Supreme Court in Union of India v. Martin Lottery Agencies Limited (2009) 12 SCC 209 to be not merely clarificatory. The following observations of the Court in paras 34 and 52 of the said decision are relevant in this context: "34. No doubt....