TaxTMI 
TaxTMI 
2018 (2) TMI 83
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.... impugned order. There are two issues involved, and we proceed to discuss them one by one. 2. The assessee is engaged in the business of providing advertising services and related activities. They also create advertisements for their clients and are also engaged in media planning and buying spaces for their clients for advertisement to be published in print and electronic media. The dispute is pertaining to the period 2005-2006 to 2007-2008 and 01.04.2008 to 16.05.2008. The appellant rendered service to M/s Result Services Pvt. Ltd., New Delhi, which was an associate/subsidiary of the appellant's company. It was noted during the course of audit that a total amount of Rs. 2,26,82,264/- was found recoverable/outstanding as on 16.05.2008 fr....
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....st. 4. The second issue which is in dispute is pertaining to Service Tax payable by the appellant in respect of certain services received from foreign service providers. Such amounts become payable by the appellant on reverse charge basis on the basis of the statutory provisions of Section 66A of the Finance Act, 1994. In terms of Rule 5 of the Taxation of Services (Provided from outside India and received in India) Rules, 2006, the Service Tax payable on reverse charge payable is required to be paid in cash. However, the appellant made payment of Service Tax amounting to Rs. 1,93,74,146/- by making use of Cenvat credit. The adjudicating authority ordered for payment of this amount in cash and observed that the appellant will be eligible....
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....reme Court in the case of Union of India versus M/s Martin Lottery Agencies, reported as 2009(14) S.T.R. 593 S.C., in which the Apex Court has held that any amendment in the statute by which the charging provision has been widened, cannot have retrospective operation. He argued that the appellant is liable to pay Service Tax for such amounts only after 10.05.2008 and the appellant has already deposited the amount of Service Tax along with the interest on that portion of the amount outstanding from the subsidiary. 8. On the second issue wherein the appellant has made use of Cenvat credit for discharge of Service Tax liability arising on reverse charge basis for services received from foreign service providers, he argued that the adjudicat....
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....ity in Para 20 of the impugned order. 11. We have heard both sides at length and perused the records. 12. We first consider the issue of amendment of the statute with effect from 10.05.2008. By this amendment, the amount adjusted with an associate enterprise towards service rendered for such enterprise is to be considered as part of gross amount charged for such services. The appellant has rendered services to its subsidiary M/s Result Services Pvt. Ltd. The audit found a large amount outstanding from the subsidiary as on 16.05.2008. The stand of the appellant is that the appellant was not required to pay Service Tax on such amounts recovered by book adjustments from the subsidiary prior to the amendment. For the amount adjusted after....
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....ion within the purview of Entry 97, the same will have a bearing on the States. The Explanation so read appears to be a charging provision. It states about taxing need. It can be termed to be a sui generis tax. If it is a different kind of tax, the same may be held to be running contrary to the ordinary concept of service tax. It may, thus, be held to be a standalone clause. A constitutional question may have to be raised and answered as to whether the taxing power can be segregated. If, by reason of the said explanation, the taxing net has been widened, it cannot be held to be retrospective in operation." 13. It has been categorically held by the Apex Court that the explanation inserted in the statute through which the taxing net has be....
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....se of products cleared from one factory to another factory of the same company. It has been held that if higher duty is paid in the first factory, the same will be available as Cenvat credit in the second factory. Therefore, the assessee could not have any intention to evade duty. The situation in the present case is entirely different. The statute specifically provides that Service Tax payable on reverse charge basis in terms of Section 66(A) of the Act is required to be discharged by making payments in cash. Once such Service Tax is paid in cash, Cenvat Credit Rules allow credit of the same. This cannot be interpreted to mean that it is a revenue neutral situation. The credit is allowable contingent upon the tax being paid in cash. In ....