2018 (8) TMI 18 - AT - Service Tax

Advertising Agency Services - demand of service tax on difference in the amount shown in Balance Sheet and amount shown in ST-3 returns - job-work and sale of material also done by appellant - Held that - The Original Authority did not take into consideration the said contention of the appellant that part of the value on which service tax was not paid was on account of job work of printing of Hoardings, Banners etc., installation of the Tree Guards and sale of advertising material - matter requires reconsideration - appeal allowed by way of remand.

Summary

Issues:
Appeal against demand of service tax and penalty under Sections 76 and 78 of the Finance Act, 1994.

Analysis:
The case involved an appeal against an Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax, Lucknow. The appellants, engaged in 'Advertising Agency Services,' were issued a show cause notice for non-payment of service tax on a discrepancy in the amount received and the assessable value shown in returns. The revenue alleged a difference of ?4,74,77,539 on which service tax was not paid, leading to a demand of ?48,90,187. The Original Authority confirmed the demand and imposed a penalty under Section 76 of the Finance Act, 1994, but dropped the proposal for penalty under Section 78. Both the revenue and the appellant appealed against different aspects of the Order-in-Original dated 11.06.2014. The Commissioner (Appeals) upheld the Order-in-Original, prompting the appellant to approach the Tribunal.

During the hearing, the Tribunal observed that the show cause notice presumed the amount difference as unpaid service tax without considering the nature of the transactions. The appellant argued that part of the discrepancy was due to job work involving printing of hoardings, banners, installation of tree guards, and sale of advertising material on which VAT was paid, but no service tax was collected. The Tribunal found merit in the appellant's contentions and remanded the matter to the Original Adjudicating Authority. The Authority was directed to allow the appellant to produce evidence supporting their submissions, consider the same, and provide a personal hearing before making a decision.

In its final order, the Tribunal set aside the impugned order and allowed the appeal by way of remand to the Original Adjudicating Authority. The decision highlighted the importance of considering all aspects of the transactions before determining the liability for service tax, emphasizing the need for a fair opportunity for the appellant to present their case and evidence.