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2014 (5) TMI 650 - AT - Service TaxDemand of service tax - 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 - Held that:- 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 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 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. - demand of service tax with interest and penalty confirmed - Decided against the assessee.
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