2018 (7) TMI 1125 - AT - Service Tax

Levy of Service tax - amount received from Print Media and passed on to its customers as additional discount - Held that - The service tax is leviable on the taxable service provided by the advertising agency to its clients and there is no shortfall on the service tax payment on the amounts billed to the clients - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Validity of Order-in-Revision passed by the Commissioner under Section 84 of the Finance Act, 1994.
2. Allegation of short payment of service tax by the appellant.
3. Applicability of service tax on commission received from Print Media.
4. Imposition of penalties under Sections 76, 77, and 78.
5. Demand of interest under Section 75.

Analysis:
Issue 1: The appeal challenged the Order-in-Revision passed by the Commissioner under Section 84 of the Finance Act, 1994, setting aside the original authority's decision. The appellant contended that the revision order was unsustainable in law, citing binding judicial precedents.

Issue 2: The appellant, registered as an Advertising Agency Service provider, faced allegations of short payment of service tax amounting to ?69,365 for the period from April 2005 to June 2006. The Assistant Commissioner dropped the proceedings, but the Commissioner, under Section 84(1), issued a notice confirming the demand of ?16,503 as short-paid service tax on commission from Print Media.

Issue 3: The appellant argued that the service tax was erroneously levied on the commission received from Print Media, passed on as an additional discount to customers. Citing precedents, the appellant contended that service tax is applicable only on taxable services provided to clients, not on discounts from media.

Issue 4: Penalties under Sections 76, 77, and 78 were imposed by the Commissioner, which the appellant contested. The appellant claimed no intention to evade service tax, as regular payments were made. The appellant cited judicial decisions supporting their stance.

Issue 5: The demand for interest under Section 75 was also challenged. The appellant maintained that the service tax was paid regularly, and penalties were unjustified. The learned AR defended the Commissioner's order, relying on different judicial decisions not applicable to the present case.

Final Decision: The Tribunal, after considering submissions and precedents, found the impugned order unsustainable in law. Citing specific case laws, the Tribunal ruled in favor of the appellant, setting aside the Commissioner's order. The decisions relied upon by the appellant were deemed applicable, while those cited by the learned AR were found distinguishable from the case at hand. The appeal was allowed, and the impugned order was set aside.