2014 (12) TMI 745 - AT - Service Tax

Waiver of pre deposit - Advertisement agency service - Sale of Space or Time for Advertisement Service - Held that - Tribunal in the case of Tamil Nadu Cricket Association (2009 (10) TMI 669 - CESTAT CHENNAI), directed predeposit in respect of demand of tax on sale of space and time for advertisement agency relating to sponsorship. The Tribunal in the case of Kerala State Road Transport Corporation (2010 (12) TMI 114 - CESTAT, BANGALORE), as relied upon by the learned counsel, remanded the matter as the assessee s service tax liability was not considered by the adjudicating authority as the discharge of service tax liability has been discharged by the persons who have taken the space from the assessee. In the present case, prima facie, we find that the applicant paid the tax prior to April 2009. We are unable to accept the submission of the learned counsel that the service tax liability was shifted on the advertisement agency after April 2009. In this context, the learned counsel failed to place any evidence of the discharge of service tax liability by the persons who have taken the space from the assessee. Applicant failed to make out a prima facie case for waiver of predeposit of the entire dues - Partial stay granted.

Issues:
Demand of service tax on 'Sale of Space or Time for Advertisement Service' for the period 1.4.2006 to 30.6.2011. Dispute over the liability for payment of service tax and the applicability of credit. Prima facie case for waiver of predeposit of the entire dues based on financial hardship.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai dealt with a case involving a State Government undertaking engaged in the business of transport service facing a demand of service tax amounting to &8377; 42,14,016/- along with interest and penalty for the period from 1.4.2006 to 30.6.2011 under the category of 'Sale of Space or Time for Advertisement Service' effective from 1.5.2006. The applicant contended that they had entered into an agreement with an advertisement agency in April 2009, shifting the responsibility of paying service tax to the agency from that point onwards. However, prior to April 2009, the applicant had paid the tax, leading to a demand of &8377; 1,47,000/- for the period from April 2006 to March 2009 based on certain calculations. The applicant argued that regardless of who paid the tax, they should be eligible for credit as the advertisement agency had already paid tax on the gross value, making the demand unsustainable. The applicant also highlighted their significant financial loss amounting to &8377; 149 crores and cited a previous Tribunal decision in support.

The Revenue, on the other hand, contended that the applicant did not dispute the tax payment before April 2009 and should be liable for the entire tax amount post that period. Referring to a similar case involving the Tamil Nadu Cricket Association, where 50% predeposit was directed, the Revenue argued for payment of the full tax amount post April 2009. The Tribunal analyzed the submissions from both parties and noted that in the case of the Kerala State Road Transport Corporation, the matter was remanded as the service tax liability was not considered due to payment by the parties taking the space. In the current case, the Tribunal found that the applicant had indeed paid tax before April 2009, and there was no evidence to support the claim that the liability was shifted to the advertisement agency post that date. Consequently, the Tribunal ruled that the applicant failed to establish a prima facie case for waiver of predeposit of the entire dues.

Therefore, considering the overall facts, circumstances, and the financial hardship pleaded by the applicant, the Tribunal directed the applicant to predeposit &8377; 10,00,000/- within eight weeks, with the balance dues predeposit waived and recovery stayed during the appeal process. The judgment was dictated and pronounced in open court by the Tribunal.

← Previous Next →