2016 (4) TMI 364 - AT - Service Tax

Demand of Service tax - Invokation of longer period of limitation - Providing hoarding space to the advertising agencies - Suppression of value of services, as reflected in their account books and as reflected in their ST-3 returns - Held that - the sale of space service having been introduced w.e.f. 01/5/2006 would not be covered by any other category prior to 01/5/2006. The nature and character of the services being provided by the assessee to the other advertising agencies has not been spelt anywhere, either by the Revenue or by the assessee. As such, it becomes necessary to find out what type of services were being provided by the assessee to the other advertising agencies. In as much as the said legal plea was not taken by the appellant before the lower Authorities and in as much as the same does not stand examined by them by referring to the type of services provided by the assessee, we deem it fit to set aside the impugned order and remand the matter to original Adjudicating Authority for examining the said plea of the assessee vis- -vis the type of services being provided by them. The appellant is at liberty to produce documentary evidences to show and to establish that the service being provided by them was relatable to sale of space for advertisement . It is further clear that we have not expressed any opinion on the factual position of the advertising agency having paid the entire tax on the full consideration and such a plea would be open to the appellant to be taken in denovo proceedings. - Matter remanded back

Summary

Issues:
1. Dispute regarding service tax liability for providing hoarding space to advertising agencies.
2. Allegation of suppression of service value leading to demand of service tax.
3. Challenge to confirmation of demand by lower authorities.
4. Interpretation of liability for service tax on sale of space for advertisement services.
5. Lack of clarity on nature of services provided to advertising agencies.
6. Remand of the matter to original Adjudicating Authority for further examination.

Analysis:
The judgment revolves around the dispute concerning the service tax liability of the appellant for providing hoarding space to advertising agencies. The appellant contended that they considered themselves falling under the category of an advertising agency when providing services directly to clients and had paid the service tax accordingly. However, the issue arose when the appellant also provided hoarding space to advertising agencies for placing advertisements. This led to proceedings being initiated against the appellant for allegedly suppressing the value of services, resulting in a demand for service tax amounting to approximately 4.32 crores by invoking the longer period of limitation.

The appellant argued that the differential amount was related to providing services as a sub-contractor to the advertising agency, which had already paid service tax on the full value of the advertisement, including the services provided by the appellant. The lower authorities initially did not accept this argument, leading to the confirmation of the demand. The appellant then approached the Tribunal, which remanded the matter back to the original Adjudicating Authority to examine whether the advertising agency had paid the entire service tax.

Upon further examination, the lower authorities again confirmed the demand, stating that the appellant failed to substantiate their plea with documentary evidence. The Tribunal, in its order, acknowledged that the sale of space service introduced from 01/5/2006 would not fall under any other category prior to that date. However, the nature of services provided by the appellant to the advertising agencies was not clearly defined in the proceedings.

Therefore, the Tribunal decided to set aside the impugned order and remand the matter to the original Adjudicating Authority for a detailed examination of the type of services provided by the appellant to the advertising agencies. The appellant was given the opportunity to produce documentary evidence to establish that the services were indeed related to the "sale of space for advertisement." The Tribunal clarified that the onus to prove this claim rested on the appellant.

In conclusion, the Tribunal remanded the matter for further examination, emphasizing that they had not expressed any opinion on whether the advertising agency had paid the entire tax on the full consideration. The appellant was granted the opportunity to present this plea in the denovo proceedings and establish it with evidence if necessary.