2015 (11) TMI 847 - SC - Service Tax

Valuation of service - whether the rent paid for hiring the space on buses for displaying the advertisements is to be excluded from the gross amount charged by the advertising agency from the service recipient for determining the taxable value in the light of Board s Circular dated 31st October, 1996 - Held that - as the payment of service tax on the aforesaid service rendered by the assessee to various State/Central Government Departments is concerned, that is decided in favour of the Revenue holding that the respondents are required to pay service tax on the same. However, at the same time, CESTAT has also returned the finding that the assessee shall be entitled to the benefit of Board s Circular dated 31st October, 1996 and because of this reason, the matter was remanded back to the Adjudicating Authority for recalculation of the duty payable. The CESTAT has also given liberty to the Adjudicating Authority to decide the question of imposition of personal penalty upon the assessee. Since the matter is remitted back to the Authority on the aforesaid issue, we do not find any reason to interfere with such an order passed by the CESTAT 2005 (7) TMI 6 - CESTAT, MUMBAI - Decieded against Revenue.

Summary

Issues:
- Whether the rent paid for hiring space on buses for displaying advertisements should be excluded from the gross amount charged by the advertising agency for determining taxable value.
- Whether service tax should be paid on services rendered by the assessee to various State/Central Government Departments.
- Whether the assessee is entitled to the benefit of Board's Circular dated 31st October, 1996.
- Whether the matter should be remanded back to the Adjudicating Authority for recalculation of duty payable.
- Whether the Adjudicating Authority can decide on the imposition of personal penalty upon the assessee.
- Whether the appeals preferred by the Department should be dismissed.

Analysis:
The Supreme Court considered the issue of whether the rent paid for hiring space on buses for displaying advertisements should be excluded from the gross amount charged by the advertising agency for determining the taxable value. The Court noted that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had found that the rent paid for hiring space on buses should be excluded from the gross amount charged. As a result, the matter was remanded back to the Adjudicating Authority for recalculation of the duty payable. The Court upheld this decision and did not interfere with the order passed by CESTAT in this regard.

Regarding the payment of service tax on services rendered by the assessee to various State/Central Government Departments, the Court ruled in favor of the Revenue, holding that the assessee is required to pay service tax on these services. However, the Court also acknowledged that the assessee is entitled to the benefit of Board's Circular dated 31st October, 1996. Therefore, the matter was remanded back to the Adjudicating Authority for further consideration.

The Court also addressed the question of whether the Adjudicating Authority can decide on the imposition of a personal penalty upon the assessee. The Court affirmed that the Adjudicating Authority has the liberty to decide on the imposition of a personal penalty, and since the matter was remitted back to the Authority on this issue, the Court found no reason to interfere with such an order passed by CESTAT.

In conclusion, the Supreme Court dismissed the appeals preferred by the Department, thereby upholding the decisions made by CESTAT regarding the exclusion of rent paid for hiring space on buses from the taxable value and the entitlement of the assessee to the benefit of the Board's Circular dated 31st October, 1996.