2008 (12) TMI 94 - AT - Service Tax

Appellant allowed the space for use and display of advertisement to Maheshwari Advertising (P.) Ltd. under the agreement for the business of advertisement - Demand under the category of Sale of space or time for advertisement - Prima facie, applicant provided the space in relation to advertisement - applicant failed to make out a prima facie case for waiver of pre-deposit of entire amount of tax and penalty

Summary

Issues:
Application for waiver of pre-deposit of tax and penalties in a case involving the provision of space for advertisement services.

Analysis:
The appellant, a provider of Public Transport System, allowed Maheshwari Advertising (P.) Ltd. to use and display advertisement space under a business agreement. Service tax was demanded from the appellant under the category of "Sale of space or time for advertisement." The advocate for the appellant contended that Maheshwari Advertising (P.) Ltd. rendered the advertisement service in the space and should be liable to pay the tax, as per Condition No. 9 of the contract. However, the Tribunal noted that the definition of 'sale of space or time for advertisement services' encompasses any service provided in relation to the sale of advertisement space, making the appellant liable to pay service tax. The Tribunal found that the appellant failed to establish a prima facie case for the waiver of the entire amount of tax and penalty. Consequently, the appellant was directed to deposit a sum of Rs. 1,00,000 within six weeks, with the pre-deposit of the balance amount of tax and penalties waived until the appeal's disposal.

In conclusion, the Tribunal's decision was based on the interpretation of the definition of 'sale of space or time for advertisement services' and the contractual obligations between the appellant and Maheshwari Advertising (P.) Ltd. The Tribunal found that the appellant provided the space in relation to advertisement services, making them liable to pay the service tax. The Tribunal's order for the partial waiver of pre-deposit was contingent on the appellant's compliance with the directed deposit within the specified timeline. The decision highlighted the importance of analyzing the specific terms of the contract and the legal provisions governing the taxation of advertisement services in determining liability for service tax.