2011 (3) TMI 472 - AT - Service Tax

Demand - Application of stay - Advertising agency - this matter needs examination at the end of the original authority to verify whether the main contractor has discharged the service tax liability or not. The appellant shall provide the copies of invoice to the adjudicating authority to verify whether the main contractor has discharged the service tax liability or not - Appeal is allowed by way of remand

Summary

Issues:
1. Allegation of non-payment of service tax under the category of 'Advertising agency'.
2. Appellants providing services as sub-contractor to the main advertising agency.
3. Discrepancy in payment of service tax for services provided as a sub-contractor.
4. Appeal against the order confirming demand, interest, and penalties.

Analysis:

1. The appellants filed an appeal against the order confirming the demand of service tax under the category of 'Advertising agency'. The dispute arose as the appellants were providing advertising services directly to clients and also as a sub-contractor to the main advertising agency. While service tax was paid on services provided directly to clients, it was not paid for services provided as a sub-contractor. A show-cause notice was issued, leading to the confirmation of demand, interest, and penalties. The appellants contested this decision.

2. After hearing both sides, it was agreed that the issue could be resolved without the need for a pre-deposit of the entire demand. The advocate for the appellants referred to a previous Tribunal direction in a similar case, emphasizing that if the main advertising agency pays the service tax, no additional tax is payable by the sub-contractor. The advocate requested a similar remand to the adjudicating authority for verification.

3. The Tribunal considered the submissions and decided to remand the matter to the original adjudicating authority for fresh examination. It was deemed necessary to verify whether the main contractor had indeed discharged the service tax liability. The appellants were directed to provide copies of invoices to the adjudicating authority for this verification. The original authority was instructed to decide the case promptly after granting a reasonable opportunity for the appellants to present their case.

4. Consequently, the Tribunal set aside the impugned order, remanding the matter back to the original authority for verification of the main contractor's service tax liability. The stay application and appeal were disposed of in this manner, ensuring a fair examination of the payment discrepancies and providing an opportunity for the appellants to clarify their position.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's decision to remand the case for further verification, ensuring a fair and thorough examination of the service tax payment dispute.