2025 (3) TMI 382 - AT - Service Tax

Taxability - services of selling space for advertisements in print media - service are covered under negative list or not - Recovery of service tax with interest and penalties - suppression of facts or not - extended period of limitation - Benefit of exemption under Notification No.33/2012. Taxability - HELD THAT - The appellant is admittedly providing advertisement services to print-media. Those services fall under negative list in sub-clause (g) of section 66 (b) of Finance Act. This issue stands already decided by this Tribunal in its order in the case of Adbur Pvt. Ltd. vs. Commissioner of Service Tax Delhi 2017 (5) TMI 101 - CESTAT NEW DELHI . Hence the show cause notice had wrongly proposed the demand on the amount received for rendering services to print media. The adjudicating authorities below are held to have rightly set aside the said demand. The demand of Rs.3, 99, 142/- has been confirmed on the amount received as commission for rendering the services. It is observed that the decision of this Tribunal in the case of Adbur Pvt. Ltd. vs. Commissioner of Service Tax Delhi 2017 (5) TMI 101 - CESTAT NEW DELHI has held that the commission received by the advertising agencies is chargeable to service tax. However the advertising agency being a pure agent is held not liable to pay service tax on amount payable to media companies on behalf of their clients. Extended period of limitation - HELD THAT - The invocation of extended period has been justified by the authorities below on the ground that the appellant has failed to take the service tax registration and to file their ST- 3 returns. Section 70 of the Finance Act has been invoked however in the light of the above discussion and the decisions considered by the adjudicating authorities below itself the services rendered by the appellant are held to fall under the negative list. Thus appellant had no liability to pay tax on the amount received for rendering advertisement agency service to the print media except on the amount of commission - the act of taking no service tax registration and of filing no returns is denied to be the ground for invoking extended period of limitation. The Show Cause Notice is accordingly held to be barred by time. Benefit of exemption under Notification No.33/2012 - HELD THAT - The threshold limit of Rs.10 Lakhs is to be seen for the previous financial year. The authorities below have given the benefit of Notification No.33/2012 for financial year 2017-18 as the threshold limit for previous year (2016-17) was less than 10 Lakhs. It is observed that it was less than 10 Lakhs for the financial year 2014-15 the previous year for Financial Year 2015-16. Hence the authorities below are held to have erred while not granting the benefit of Notification No.33/2012 for the financial year 2016-17 also. Conclusion - i) The services provided by the appellant fell under the negative list thus the demand proposed by the show cause notice set aside. ii) The show cause notice was time-barred due to the lack of evidence of malafide intention or suppression of facts by the appellant. iii) The authorities erred in not granting the appellant the benefit of exemption under Notification No.33/2012 for the threshold limit of Rs.10 Lakhs. Appeal allowed.

Summary

The issues presented and considered in the legal judgment are as follows:1. Whether the appellant's services of selling space for advertisements in print media are taxable under the Finance Act.2. Whether the department's invocation of the extended period of limitation is justified.3. Whether the appellant is eligible for exemption under Notification No.33/2012 for the threshold limit of Rs.10 Lakhs.Issue-Wise Detailed Analysis:Issue 1:- Relevant legal framework and precedents: The appellant provided services falling under the category of selling space for advertisements in print media. The department proposed service tax based on the income tax returns of the appellant.- Court's interpretation and reasoning: The Tribunal held that the services provided by the appellant fell under the negative list under section 66D of the Finance Act, as previously decided in Adbur Pvt. Ltd. vs. Commissioner of Service Tax, Delhi.- Key evidence and findings: The appellant's argument of non-taxability and lack of intention to evade tax was considered.- Application of law to facts: The Tribunal determined that the demand proposed by the show cause notice was incorrect, and the adjudicating authorities rightly set it aside.- Conclusions: The Tribunal allowed the appeal, setting aside the order based on the incorrect demand proposed by the show cause notice.Issue 2:- Relevant legal framework and precedents: The department invoked the extended period of limitation due to the appellant's failure to register for service tax and file ST-3 returns.- Court's interpretation and reasoning: The Tribunal held that the appellant's services fell under the negative list, and the department failed to prove malafide intention or suppression of facts to justify the extended period.- Key evidence and findings: Lack of evidence of malafide intention or suppression of facts by the appellant.- Application of law to facts: The Tribunal relied on case law to determine that the mere failure to register or file returns does not constitute suppression.- Conclusions: The Tribunal held that the show cause notice was time-barred due to the lack of evidence of suppression, and set aside the order.Issue 3:- Relevant legal framework and precedents: The appellant contested the denial of exemption under Notification No.33/2012 for the threshold limit of Rs.10 Lakhs.- Court's interpretation and reasoning: The Tribunal found that the authorities erred in not granting the benefit of the exemption for the financial year 2016-17.- Key evidence and findings: The threshold limit for the previous financial year was considered in determining the eligibility for the exemption.- Application of law to facts: The Tribunal observed that the authorities should have granted the benefit of the exemption for the financial year 2016-17.- Conclusions: The Tribunal set aside the order and allowed the appeal based on the time-barred show cause notice and the error in denying the exemption.Significant Holdings:- The Tribunal held that the services provided by the appellant fell under the negative list, setting aside the demand proposed by the show cause notice.- The Tribunal determined that the show cause notice was time-barred due to the lack of evidence of malafide intention or suppression of facts by the appellant.- The Tribunal found that the authorities erred in not granting the appellant the benefit of exemption under Notification No.33/2012 for the threshold limit of Rs.10 Lakhs.In conclusion, the Tribunal allowed the appeal, setting aside the order based on the time-barred show cause notice and errors in the denial of exemption, while also determining that the services provided by the appellant were not taxable under the Finance Act.