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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 ..... ant to three show cause notices dated 14.1.2008, 9.7.2008 and 1.8.2008, covering the gross period 1.5.06 to 31.3.08. 2. On the admitted factual scenario, the appellant claimed to be an instrumentality of the Delhi State - the Delhi Transport Corporation which provided the taxable 'sale of space or time for advertisement' 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief that the liability to remit service tax stood transferred to the recipient qua the agreements; that this was a bona fide belief which caused the failure to file returns and remit service tax. Therefore, it is contended , the extended period of limitation invoked while issuing the first show cause 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 neith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in and a contractor. The appellant RINL deducted service tax component from bills of its contractor who handled transportation of goods, @ 5% of the value, towards service tax. These deductions were disputed by the contractor and led arbitration proceedings. The High Court held in favour of the contractor 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that behalf. The final order of the High Court dated 18.1.2008 also records that in the event service tax liability is imposed, such liability shall be on the contractor, in terms of the agreement. 9. In our considered view, these orders do not transfer the substantive and legislatively mandated 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 po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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