2010 (7) TMI 312 - AT - Service Tax

Waiver of pre-deposit of service tax along with interest and penalties - contention of the applicant is that the period in this case is from May 2001 to June 2003 - contention of the applicant is that she was doing work of conceptualising and writing the contents for advertising material such as advertising films, radio and print ads which M/s. Ambience Publicis then produced as final advertising material - Held that - certificate produced by the applicant states that M/s. Ambience Publicis was paying service tax on the value of service which became part of the service rendered by M/s. Ambience Publicis and provided by the applicant - department could not produce any evidence to counter the certificate produced by the applicant. The prime advertising agency has already paid the service tax. Asking the applicant to pay service tax on the advertising materials - applicant has been able to make out a prima facie case in her favour - pre-deposit of service tax and other dues including the penalties are waived - Application allowed

Summary

Issues: Application for waiver of pre-deposit of service tax amounting to Rs. 1,70,607/- along with interest and penalties imposed upon the applicant.

Analysis:

1. Applicant's Contention:
The applicant filed for a waiver of pre-deposit of service tax, arguing that she was working on behalf of a company for a specified period and was not required to pay service tax as the main company had already paid it. She claimed to have been involved in conceptualizing and writing advertising material, which was then produced by the main company. The applicant cited case laws to support her argument, emphasizing that asking her to pay service tax would amount to double taxation as the main company had already paid it. The learned counsel referred to previous Tribunal decisions to strengthen the applicant's case.

2. Respondent's Contention:
The respondent contended that the applicant was not a sub-contractor but an independent advertisement consultant for the main company, making her liable to pay duty. The respondent argued against the waiver of pre-deposit, asserting that the applicant should be responsible for the service tax.

3. Judgment and Analysis:
The judgment highlighted that the period in question was before a specific circular came into force, making a sub-contractor liable to pay service tax. The terms of the agreement indicated that the applicant was remunerated for her work and did not directly provide services to the client. The certificate provided by the applicant confirmed that the main company had already paid service tax on the value of services rendered, which aligned with the applicant's work. The absence of evidence from the department to counter the certificate supported the applicant's case. Referring to previous Tribunal decisions, the judgment concluded that the applicant had a prima facie case in her favor. Consequently, the pre-deposit of service tax and penalties were waived, and the recovery of the same was stayed during the appeal process.

4. Conclusion:
The application for waiver of pre-deposit of service tax and penalties was allowed based on the applicant's argument, supported by the terms of the agreement and the certificate provided. The judgment emphasized the absence of evidence from the department to refute the applicant's claim, leading to the decision in favor of the applicant.