2016 (9) TMI 432 - AT - Service Tax

Waiver of pre-deposit - Demand alongwith interest and penalties - Advertising Agency Services - activity of painting of banners as per designs and manners prescribed by the clients of the applicant - Held that - prima facie we are of the view that painting the banners by the applicant is not covered under the category of Advertising Agency Services . Therefore, the applicant has made out a case for complete waiver of pre deposit. Accordingly, we waive the requirement of pre-deposit of entire amount of service tax, interest, penalties, and stay recovery, thereof during the pendency of the appeal. - Waiver granted

Summary

Issues:
1. Whether the activity of painting banners undertaken by the applicant falls under the category of 'Advertising Agency Services' for the purpose of service tax liability.
2. Whether the applicant is liable to pay service tax on the activity of painting banners as per designs and manners prescribed by clients.
3. Whether the applicant is required to make a pre-deposit of the demanded amount during the pendency of the appeal.

Analysis:

1. The Tribunal considered the contention that the applicant, engaged in painting banners as per client specifications, does not provide 'Advertising Agency Services.' The applicant argued that a previous decision relied upon by the Commissioner was overruled by the Supreme Court. The Tribunal, prima facie, agreed with the applicant that the activity does not fall under the said category, leading to a waiver of pre-deposit.

2. The Revenue argued that the applicant was initially registered under 'Advertising Agency Services' and inconsistently collected service tax from clients. The applicant refuted this claim, stating that any collected service tax was duly paid to the department. The Tribunal noted that the entire demand pertained to painting banners as per client instructions, indicating a lack of liability for service tax.

3. After hearing both parties and assessing their submissions, the Tribunal found that the activity of painting banners did not constitute 'Advertising Agency Services.' Consequently, the Tribunal waived the requirement of pre-deposit for the entire amount of service tax, interest, penalties, and stay recovery during the appeal process, in favor of the applicant.