2018 (4) TMI 1507 - AT - Service Tax

Scope of SCN - Classification of services - advertisement in print media - Held that - The demand was raised under the category of Renting of Immovable Property Service but the services were classified under Sale of Space in print media which is non- taxable for the period under consideration - When the service is for sale of space for advertisement in print media then it can not be treated as renting of immovable property - demand do not sustain. Penalty - service tax with interest paid before issuance of SCN - Held that - the respondent has already paid the Service Tax along with the interest before issuing of the show cause notice - When it so, then penalty is not leviable as per the ratio laid down in Commissioner V/s Rashtriya Ispat Nigam Ltd. 2003 (5) TMI 509 - SUPREME COURT - penalty set aside. Appeal dismissed - decided against Revenue.

Summary

Issues: Classification of services under Service Tax department, Penalty imposition

Classification of services under Service Tax department:
The appeal was filed by the Department against the Order-in-Original No. 199/2013 dated 13/12/2013. The respondent, registered with the Service Tax department since November 2008, was subjected to a demand of ?1,10,550 due to a dispute regarding the classification of services. The Commissioner categorized the services under Renting of Immovable Property Service, while the respondent argued that the services fell under Sale of Space in print media, which is non-taxable. The Tribunal concurred with the respondent's argument, stating that selling space for advertisement in print media does not constitute renting of immovable property. Consequently, the Tribunal upheld the impugned order on this issue.

Penalty imposition:
The Department's second grievance pertained to the imposition of a penalty. It was noted that the respondent had already paid the Service Tax along with interest prior to the issuance of the show cause notice. Citing precedents such as Commissioner v/s Rashtriya Ispat Nigam Ltd., CCE v/s Gaurav Mercantiles Ltd., and CCE v/s S.B. Packaging, it was argued that in such cases, where the tax and interest have been paid before the notice, penalty is not leviable. The Tribunal, in alignment with the established legal principles, found no grounds to interfere with the impugned order on this issue as well, thereby dismissing the Department's appeal.

In conclusion, the Tribunal dismissed the Department's appeal, affirming the impugned order in its entirety.