2009 (4) TMI 8 - AT - Service Tax

Commissioner (Appeals) dismissed the appeal as barred by limitation by applying provisions of sub-section (1) of Section 35 of the Central Excise Act, 1944- Appellant state that according to Section 85 (3) of the Finance Act, 1994, the statutory period of limitation for filing an appeal is 90 days and the period which the authority is empowered to condone is further 3 months after the expiry of 90 days period order of Commissioner (A) is set aside - appeal is thus allowed by way of remand

Summary

Issues:
1. Timeliness of appeal filing and condonation of delay.
2. Demand of service tax on the grounds of providing "advertising agency service".

Analysis:

Issue 1: Timeliness of appeal filing and condonation of delay
The judgment addresses the issue of timeliness of appeal filing and condonation of delay. The appellant filed an appeal against the demand of service tax and penalties, seeking waiver of predeposit. The Commissioner (Appeals) dismissed the appeal as time-barred, citing a limitation period of 60 days under the Central Excise Act, 1944. However, the Tribunal noted that the correct provisions to be applied were under Section 85(3) of the Finance Act, 1994, which allowed a statutory period of 90 days for filing an appeal, extendable by a further 3 months. As the appeal was within the extended period, the Tribunal set aside the order and remanded the case to the lower appellate authority for a fresh decision, emphasizing the need for a fair hearing and proper consideration of the condonation application.

Issue 2: Demand of service tax on the grounds of providing "advertising agency service"
The judgment also delves into the issue of the demand of service tax based on the assertion that the appellants were providing "advertising agency service." The Tribunal acknowledged that the issue at hand was narrow and required detailed examination. Despite allowing the appeal by way of remand due to the timeliness issue, the Tribunal directed the lower appellate authority to reconsider the merits of the case concerning the demand of service tax and penalties. The appellants were to be given a fair opportunity to present their case, indicating the importance of a thorough review of the facts and legal aspects involved in determining the applicability of service tax in the context of the services provided.

In conclusion, the judgment by the Appellate Tribunal CESTAT CHENNAI, delivered by Ms. Jyoti Balasundaram, Vice-President, and Mr. P. Karthikeyan, Member (Technical), highlights the significance of adhering to the correct statutory provisions for appeal filing timelines and the need for a comprehensive review of the grounds for demanding service tax. The decision underscores the principles of procedural fairness and the importance of a thorough examination of legal provisions in resolving tax-related disputes effectively.