2009 (11) TMI 454 - AT - Service Tax

Stay Limitation Renting of space for affixing/making pole advertisement. Activity for which demand confirmed not possible to be made out from original order. Copy of SCN also not available. Revenue not substantiated claim that order in original served to appellants in accordance with law. Held that absence of evidence of affixing order in original on doors of assessee or notice board of authority concerned. Thus prima facie case made out for waiver of pre-deposit.

Summary

Issues:
Appeal dismissal on grounds of time bar; Demand of service tax under 'advertising agency'; Condonation of delay in filing appeals; Waiver of pre-deposit and stay of recovery of demands.

Analysis:
The impugned order dismissed the appeals filed by the appellants due to being time-barred. The appeals involved demand of service tax under the category of 'advertising agency'. The appellants had filed applications for condonation of a 47-day delay. The Commissioner (Appeals) noted that the department had followed the procedure for service of the order as per Section 37C of the Central Excise Act, 1944. The appellants contested that the original authority's orders were passed ex-parte and were never served on them. They argued that the activity in question did not fall under any taxable service defined in the Finance Act, 1994. The appellants claimed that the demands and penalties were not justified on merit as the activity became taxable only after a specific amendment in the statute.

During the hearing, the learned Chartered Accountant for the appellants emphasized that the original authority's orders were ex-parte and not served on them. He contended that the activity they were engaged in did not align with any taxable service under the Finance Act, 1994. On the other hand, the learned SDR argued that the Department had indeed served the original authority's order on the appellants, and the Commissioner (Appeals) rightly rejected the appeal on the basis of being time-barred. The SDR recommended dismissing the stay applications and appeals filed.

Upon careful consideration of the case records and arguments from both sides, the judge found it difficult to ascertain the specific activity conducted by the appellants during the relevant period, for which the service tax demand was confirmed along with penalties. The absence of a copy of the show cause notice further complicated the matter. The judge noted that the evidence supporting the proper service of the Order-in-Original on the appellants was lacking. The SDR was unable to substantiate the claim of serving the orders in accordance with the law without evidence of affixing them on the doors or notice board of the concerned authority. In light of these uncertainties, the judge concluded that the appellants had established a prima facie case for the waiver of pre-deposit of the amounts confirmed in the impugned order. Consequently, there was a waiver of pre-deposit and a stay of recovery during the pendency of the appeals.