Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 748 - CESTAT MUMBAIClassification - Advertisement services or Business Auxiliary services - all the cricket players are engaged through the appellant in providing advertisement and promotion of the product of M/s. Hero Honda Motors Ltd. The appellant are paid the consideration towards advertisement performed by the celebrities. - Period involved is 1-4-2000 to 30-6-2003 - Appellant submitted that they are not advertising agency and their services were rightly classifiable under Business Auxiliary Services which became taxable only w.e.f. 1-7-2003 therefore on the BAS, since there was no tax liability prior to 1-7-2003 no demand can be raised since the services admittedly covered under BAS and they have been paying service tax under such head w.e.f. 1-7-2003. Held that:- from the tripartite agreement, it clearly shows that It is also undisputed that the payment consideration towards advertisement performed by the celebrities are received by the appellant, therefore appellant is legally liable for payment of service tax under the category of advertising services during the period involved in the present case. As regard the contention of the appellant that the services are of promotion of sale of goods of M/s. Hero Honda Motors Ltd. and therefore the same is classified as Business Auxiliary Service which became taxable only from 1-7-2003, we do not agree with this contention for the reason that services of celebrities are nothing to do with the promotion of the sale whether sale is promoted or not, the service of celebrities is confined to display of brand and advertise the product of M/s. Hero Honda Motors Ltd., therefore, services are clearly of ‘advertising services’ and not of BAS. By applying the decision of Madras High Court in the case of of M/s. Adwise Advertising Pvt. Ltd. Vs. Union of India [2001 (3) TMI 1 - HIGH COURT (MADRAS)], locating or selecting a particular media would be a “Service”, by the advertising agency “in relation to the advertisements”. Appellant, as the service provider, were legally bound to collect and pay service tax, and a clause in the agreement cannot absolve the Appellant of their responsibility for paying the service tax on the taxable advertising services, rendered by them during 1-4-2000 to 30-6-2003. Imposition of penalty - Section 76 and 78 of that Act - Held that:- by applying the decision of Hon'ble Kerala High Court in the case of Asst. CCE & Ors. Vs. Krishna Poduval & Ors. [2005 (10) TMI 279 - Kerala High Court], despite providing taxable advertising services, during the period 1-4-2000 to 30-6-2003, they had suppressed the fact that the amount realized by them was for the said taxable services provided by them during the relevant period. Therefore, penalty is imposable as a person who is guilty of suppression deserve no sympathy. Invocation of extended period of demand - Non-disclosure of advertising services to the department and despite possessing the registration also not disclosed to the department, the provisions of services and collection of amount thereagainst - Held that:- it is a clear case of suppression of facts on the part of the appellant. Moreover in some of the agreements, the clause related to payment terms contains the liability of payment of Service Tax. Therefore the larger period of demand was rightly invoked. Since there is suppression of facts, the appellant was legally liable for penalties under Sections 76 and 78. The impugned order does not require any interference, hence the same is maintained. - Decided against the appellant
|