2015 (8) TMI 690 - HC - Service Tax

Waiver of Pre deposit - Broadcasting Service - Assessee contends that the appeal should be heard on merits - Held that - There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. In the facts of the present case, we find that there has been certain payments made after the issuance of show cause notice as against the demand and the Adjudicating Authority has given certain benefits. After taking note of the plea of no service tax liability, we find that the Original Authority has revised the cum tax value. - there appears to be an element of justification in the assessee s plea that the demand of tax liability has to be considered by the Tribunal on merits - force in the plea of the appellant regarding undue hardship and financial difficulty in pursuing the appeal on payment of the pre-deposit as ordered by the Tribunal. Matter remanded back - Partial stay granted.

Summary

Issues:
1. Tribunal's order for pre-deposit in an appeal against the order of the original authority.
2. Consideration of up-linking charges as taxable broadcasting service.
3. Rejection of appellant's plea regarding tax liability and limitations.
4. Tribunal's acceptance of the findings of the Adjudicating Authority.
5. Tribunal's decision on pre-deposit without considering the validity of the original authority's order.
6. Service of demand notice and its compliance with statutory provisions.

Issue 1: Tribunal's order for pre-deposit
The appellant challenged the Tribunal's order for pre-deposit, arguing that the original authority had not proven the tax liability for broadcasting services. The Tribunal had relied on the permission letter from the Ministry of Information and Broadcasting and overlooked the appellant's explanations regarding separate corporate entities. The appellant also questioned the Tribunal's acceptance of the findings of the 2nd respondent without considering the explanations provided by them.

Issue 2: Consideration of up-linking charges
The case involved a dispute regarding the classification of up-linking charges as taxable broadcasting services. The appellant contended that they were only providing up-linking services, not broadcasting services. However, the Tribunal, based on the appellant's profit and loss account, found evidence of collecting fees for airtime allotment, indicating a service related to broadcasting. The Tribunal ordered a pre-deposit, considering the payments made by the appellant after the show cause notice.

Issue 3: Rejection of appellant's plea
The appellant's plea regarding tax liability and limitations was rejected by the Tribunal, which found prima facie evidence of broadcasting services being provided by the appellant. The Tribunal emphasized the need to examine the factual issues during the appeal hearing and upheld the pre-deposit order, granting a further period for compliance.

Issue 4: Acceptance of Adjudicating Authority's findings
The Tribunal accepted the findings of the Adjudicating Authority, which confirmed the demand for service tax based on the income recorded under broadcasting services. The Adjudicating Authority revised the tax value after considering the appellant's contentions, leading to a revised demand amount.

Issue 5: Tribunal's decision on pre-deposit
The Tribunal's decision on pre-deposit without fully considering the validity of the original authority's order was challenged by the appellant. The Tribunal's order for pre-deposit was modified by the High Court, considering the appellant's plea of financial difficulty and undue hardship. The High Court held that the Tribunal was not justified in ordering the pre-deposit and reduced the amount to be deposited by the appellant.

Issue 6: Service of demand notice
The appellant raised concerns about the service of the demand notice, arguing that it was not compliant with the statutory provisions. The Tribunal's decision to uphold the pre-deposit was based on the payments made by the appellant post the show cause notice, indicating a partial acceptance of the tax liability.

In conclusion, the High Court modified the Tribunal's order, reducing the pre-deposit amount based on the appellant's financial constraints and the need for a detailed examination of the tax liability related to up-linking charges. The judgment highlighted the importance of considering the merits of the case during the appeal hearing and ensuring compliance with statutory provisions in tax matters.