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TMI Blog2014 (5) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... justify a belief that the appellant/service provider,was not liable to service tax. It is axiomatic that no person can harbour a ‘bona fide belief’ that a legislated liability could be excluded or transferred by a contract. The appellant was clearly and exclusively liable to service tax on rendition of the taxable service of ‘sale of space or time for advertisement’. This liability involved the non-derogable obligation to obtain registration, file periodical ST -3 returns and remit service tax on the consideration received during the period covered by such ST-3 returns. These were the core and essential obligations the appellant should have complied with. These orders do not transfer the substantive and legislatively mandated liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvertisement service to several advertising agencies but failed to obtain registration, file returns or remit service tax on the consideration received for rendition of the taxable service. 3. The Anti-Evasion Branch, on the basis of investigations discovered that the appellant had provided the taxable service by providing space for advertisements on its buses, bus queue shelters, time keeping booths and other properties. Letters and reminders were issued to the appellant to provide relevant information and the transactional documents. Show cause notices were eventually issued during January 2006 to August 2008, covering different periods. 4. In response to the show cause notices, the appellant contended that agreements entered with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 4.1.08 is unjustified and for the same reasons, penalty under Section 78 of the Act should not have been imposed, by exercising discretion under Section 80 of the Act. 6. A bona fide belief is a belief entertained by a reasonable person. The appellant is a public authority and an instrumentality of the State and should have taken care to ascertain whether it was liable to tax in terms of the provisions of the Act. There is neither alleged, asserted nor established that there is any ambiguity in the provisions of the Act, which might justify a belief that the appellant/service provider,was not liable to service tax. It is axiomatic that no person can harbour a bona fide belief that a legislated liability could be excluded o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractor and against RINL. Allowing the appeal by RINL, the Supreme Court observed that the statutory provisions concerning services are relevant only as between RINL and the Revenue authority; such provisions could be of no relevance to determine the rights and liabilities between RINL and the respondent - contractor qua the terms as agreed in the contract between the parties; the law does not prohibit RINL from entering into an agreement with the respondent - handling contractor that the burden of any tax arising out of obligations of the respondent under the contract would be borne by the respondent/contractor. In the context of the facts and the litigative contours falling for consideration before it, the Supreme Court had observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed liability to service tax from the appellant who is the service provider to the advertisers, who are the service recipients. The liability of advertisers bear the burden of service tax, in terms of agreement between the parties, is the conclusion of the High Court. The decision cannot be interpreted or understood as shifting the liability or inherence of service tax, under the provisions of the Act, on the service recipient. It is a well settled position that legislation is not rejected or amended by private agreement. 10. There are no merits. The appeals fail and are accordingly dismissed. 11. In the facts of the case and in view of contentions on behalf of appellant, we clarify that if the appellant produces before the respondent/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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