2018 (3) TMI 21 - AT - Service Tax

Taxability of services - advertising services - appellant took a stand that all the services being provided by them were not taxable services and as such no tax was being paid on the same - Held that - there are are general grounds without referring to any distinct services having been provided by appellant, falling under the category of non-taxable services - Inasmuch as the said issue raised by the appellant has not been considered by the Lower Authorities, we deem it fit to set aside impugned order and remand the matter to Original Adjudicating Authority - appeal allowed by way of remand.

Summary

Issues:
- Non-payment of service tax during 2003-2008
- Discrepancy in tax collection for identical services
- Confirmation of demand, interest, and penalties
- Appeal regarding non-taxable services
- Lack of consideration of non-taxable services by lower authorities

Analysis:

1. The appellant was engaged in providing services as an advertisement agency and was found to have not paid service tax during the period 2003 to 2008 for services falling under this category. It was discovered that while the appellant provided identical services to clients, they selectively paid service tax - collecting tax for certain services and depositing it, while not collecting tax for the same identical services, leading to a discrepancy in tax payment.

2. Proceedings were initiated against the appellant through a show cause notice raising a demand of ?8,62,729, which was confirmed by the Original Adjudicating Authority along with interest and penalties. The appellant argued before the Commissioner (Appeals) that the services provided were not taxable, but this defense was not adequately presented to the authorities below.

3. The Appellate Authority noted that the services provided by the appellant were identical, and while tax was paid for some services, it was not paid for others. Consequently, the impugned order was upheld, and the appeal was rejected based on the lack of specific references to non-taxable services in the grounds of appeal.

4. The appellant contended that the services rendered by them were introduced after 01/05/2006 and, therefore, the demand confirmation before this date was unjustified. As this issue was not addressed by the lower authorities, the Tribunal decided to set aside the impugned order and remand the matter to the Original Adjudicating Authority.

5. The Tribunal directed the Adjudicating Authority to allow the appellant to present documentary evidence to demonstrate that the services for which service tax was not paid were different from advertising services and were non-taxable during the relevant period. The issue of time bar was also left open for the Adjudicating Authority to reconsider.

6. Consequently, the impugned orders were set aside, and the appeal was allowed for remand, providing an opportunity for the appellant to substantiate their claims regarding non-taxable services and for the Adjudicating Authority to re-evaluate the matter, including the issue of time bar.

This detailed analysis of the judgment highlights the issues of non-payment of service tax, discrepancies in tax collection, confirmation of demand, and the consideration of non-taxable services, providing a comprehensive overview of the legal proceedings and decisions made by the Tribunal.