2015 (8) TMI 902 - AT - Service Tax

Demand of service tax - Programme Producers Service - appellant herein had produced a programme i.e. Antakashari for Star India and received consideration from them but did not discharge the service tax liability - Held that - agreement entered by appellant with Star India very categorically states that appellant was commissioning for producing the programme Antakashari for Star India. In view of this we hold that the service tax liability and interest thereof are correctly determined by the adjudicating authority and we also note that the appellant is not seriously contesting the service tax liability. - penal provisions of Section 76 and 77 would be clearly applicable in the facts and circumstances of this case - However, penalty u/s 78 is set aside - Decided partly in favour of assessee.

Summary

Issues:
Service tax liability on the appellant under the category of "Programme Producers Service" - evasion of service tax liability - payment of service tax liability along with interest - penalties imposed under Section 76 and 78 of the Finance Act, 1994.

Analysis:

Service Tax Liability:
The appellant produced a programme for Star India and received consideration but did not discharge the service tax liability. The department noted the evasion, and after the appellant paid the tax liability with interest, the adjudicating authority confirmed the demands and imposed penalties under Sections 76 and 78 of the Finance Act, 1994. The appellant pleaded leniency due to financial crisis but had filed returns without depositing the tax amount.

Penalties Imposed:
The adjudicating authority found that the appellant had received the value of taxable service along with service tax but failed to deposit the tax amount with the government. The financial crisis was not considered a valid reason for the delay. The penalties under Sections 76 and 78 were imposed based on the failure to deposit the collected service tax amount for business purposes.

Judgment:
The tribunal held that the appellant was liable for the service tax under the agreement with Star India, rejecting the argument that no tax liability existed. The penalties under Sections 76 and 77 were upheld as the appellant had filed returns indicating the tax amount collected. However, the penalty under Section 78 was set aside as the appellant had recorded the collected amount in their books and filed returns, showing no intention to evade tax. The appeal was disposed of accordingly, upholding the penalties under Sections 76 and 77 but setting aside the penalty under Section 78.

This comprehensive analysis covers the issues of service tax liability, penalties imposed, and the tribunal's judgment on each aspect of the case.