TMI Blog2019 (5) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant(s) Sh. Atul Handa, A.R. for the Respondent(s) ORDER Per: Devender Singh Brief facts of the case are that the appellants had provided taxable service in the category of sale of space or time for advertisement to M/s Gujarat Ambuja Ltd. The aforesaid service is specified under Section 65(105)(ZZZm) of the Finance Act, 1994 as a service leviable to tax with effect from 01.05.06. In this regard, two agreements dt. 07.10.1999 and 05.003.05 were entered into by the appellant with M/s Gujarat Ambuja Ltd. 2. Revenue received an intelligence that the appellant had not paid service tax on part of the agreement. Investigations were conducted and it was found that the agreement dt. 07.10.1999 was for period 01.10.99 to 30.04.2006 and total consideration was for ₹ 75,00,000. The appellants had received ₹ 55,00,000/- on 07.10.1999 and 24.01.2006. Hence, no service tax was leviable for the period upto 30.04.2006 under the aforesaid agreement. Agreement dt. 05.03.05 was for the period 01.03.05 to 28.02.15 and total consideration was ₹ 1 crore 20 lakhs. Under this agreement, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2007 and 20.11.07. From December, 2007 onwards, they had been depositing their liability regularly and had deposited ₹ 3,56,933/- upto March, 2008. He contended that they had deposited the interest as per the letter dt. 17.05.07 of the Department. There was thus no justification for asking interest on lump sum payment of service tax. He also invited attention to the Board Circular dt. 05.11.03 in which it was mentioned that the value of service tax received in advance for a service becoming taxable subsequently, service tax has to be paid attributable to relevant month/quarter on pro-rata basis. He also contended that the penalty under Section 78 was not justified as there had been regular exchange of correspondence with the Department and in those circumstances suppression cannot be alleged and as there was bona fide reason for them for not depositing the service tax lump sum, they were entitled to benefit of Section 80 of the Finance Act. 9. Ld. AR also relied upon the Board Circular dt. 05.11.03 and submitted that the amount of service tax was to be worked out on pro rata basis but has to be paid on lump sum basis as analysed in the order of the Ld. Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in terms of Rule 6 of Service Tax Rules 1994, the service tax was required to be paid to the credit of the Central Government by the 5th of the month immediately following the calendar month in which the payments were received towards the value of taxable services (emphasis supplied). Rule 6 provides for payment of service tax on taxable services on receipt of payment of the value of taxable services, which may be after the completion of taxable service, during the course of providing the taxable service or in advance before the provisioning of taxable service. In the case of appellant, subject services being provided by them became taxable from 01.05.2006 onwards and on that day they were already in receipt of payment in advance in respect of taxable services to be provided subsequently. As such the twin requirements for payment of service tax by 5th day of the following month namely, (i) that payment should be for value of taxable service to be provided and (ii) the actual receipt of the said payment, existed on 01.05.2006. In view of thereof, while the Board Circular dt. 05.11.2003 provided the basis to work out the value on pro-rate basis for the period prior to 01.05.2006 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting in line with instructions of the Department from the beginning and there was change in the stand of Department, benefit of Section 80 would be admissible to the appellants. Since, we have allowed the benefit of Section 80 of the Finance Act to the appellant, the Revenue s appeal No. ST/622/2009 against order of Commissioner s (Appeal) dropping the penalty under Section 76 is liable to be dismissed. 17. In view of the above, the demand of ₹ 8,33,340/- along with interest is upheld. Penalties imposed are set aside by allowing the benefit of Section 80 of the Finance Act 1994. 18. In result, (i) appeal No. ST/706/09 is disposed of in above terms; (ii) Revenue s appeal No. ST/622/09 is rejected. (pronounced in the court.........) Devender Singh Member (Technical) Archana Wadhwa Member (Judicial) Per: Archana Wadhwa: With respect to ld. Member (Technical), I have a different opinion about the confirmation of interest, as held by ld. Member (Technical). Accordingly, separate order is being recorded. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, the ld. Member (Technical) has himself held that there was no mis-statement etc. on the part of the appellant and has set aside the penalty, it has to be held that the interest demand would also be barred by limitation. Accordingly, by following the above referred order of the Hon ble Supreme Court as also Hon ble High Court, I hold that the demand of interest is barred by limitation and is required to be set aside. Accordingly, I set aside the impugned order and allow the appeal with consequential relief to the appellant. However, as regard setting aside of Penalty, I agree with the ld. Member (Technical). (Archana Wadhwa) Member (Judicial) Difference of Opinion Whether the impugned order is required to be upheld for the purpose of confirmation of demand of interest as held by Ld. Member (Technical) or the interest demand has to be set aside as barred by limitation, as held by Member (Judicial). (Devender Singh) Member (Technical) (Archana Wadhwa) Member (Judicial) Per: Ashok Jindal 5. Heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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