2003 (12) TMI 1 - AT - Service Tax

Service Tax Advertisement charges (1) Advertisement of various products showed in film and payment received therein liable to service tax (2) Stay/Dispensation of pre-deposit of service tax

Summary

Issues:
- Dismissal of appeal by Commissioner (Appeals) due to non-deposit of duty and penalty
- Liability to pay Service Tax for displaying advertisements in a movie
- Failure to establish a prima facie case for granting stay petition unconditionally
- Direction to deposit Rs. 8 lakhs within 30 days and report compliance to Commissioner (Appeals)

Analysis:
The judgment by the Appellate Tribunal CESTAT, Mumbai, delivered by Member (J), Archana Wadhwa, addressed multiple key issues. Firstly, the dismissal of the appellant's appeal by the Commissioner (Appeals) was based on the failure to deposit the entire duty and penalty as directed in the stay order dated 12-8-2003. The Tribunal noted that the demand was confirmed against the appellant for displaying advertisements in the movie "Yaadein" and held them liable to pay Service Tax under Section 65(3) of the Finance Act, 1994. The lower authorities interpreted the definition of "Advertising agency" broadly, encompassing any commercial entity involved in advertisement-related services. Reference was made to Trade Notice No. 1/96-ST, clarifying the service tax liability of film producers charging clients directly for advertisements in films or documentaries they produce.

Secondly, the Tribunal emphasized that the appellant failed to establish a prima facie case in their favor to warrant an unconditional grant of the stay petition. Notably, the appellant did not claim any financial hardship during the proceedings. Consequently, the Tribunal directed the appellants to deposit Rs. 8 lakhs within 30 days from the receipt of the order. The timeline for compliance was set at 15 days after the deposit, requiring the appellants to report compliance to the Commissioner (Appeals) for further consideration. The Tribunal disposed of the stay petition and appeal through remand, indicating a procedural step for the subsequent review of the appeal on its merits.

In conclusion, the judgment underscores the importance of compliance with procedural requirements, the interpretation of statutory provisions governing Service Tax liabilities, and the necessity of establishing a prima facie case when seeking relief through a stay petition. The Tribunal's decision to direct the deposit of a specific amount within a defined timeframe reflects a balanced approach to addressing the legal and financial aspects of the case while ensuring due process in the appellate proceedings.