Service Tax Exemption

Dear Friends,

I Have query a person rendering services threshhold exemption limit neither exceeded in current year nor in previous year?

for exemple 2008-09 exemption claimed on thershhold basis Rs 6,50,000/-

Few new client insisted to charge service tax in the bill and accordingly assessee collected and paid  Service Tax  to that extent  and file the return accordingly. Say amount Rs. 1,00,000/- + Service Tax Rs 12,360/-

The seprintendent of service tax denied exemption and accordingly levied service tax on  total amount without applying threshhold exemption on the ground that Either can claim thersh hold or pay service tax  for the service rendered  I.e.(6,50,000 + 1,00,000) @ 12.36%  i.e.92,700/-

We replied to ASST Commr. ... It was wrongly advised by someone else and accordingly the client is innocent and the levy of service tax on whole amount will be very costly, being all rest are retail customer etc.

I WANTED TO KNOW IS THER ANY WAY OUT OR SUCH FOR SUCH TYPE ANY DECIDED CASE LAWS IN KNOWLEDGE TO REPORT.

PLEASE ADVICE

SURESH SOMAIYA

9321745765