Space selling not taxable as advertising agency service; delay condoned and pre-deposit waived pending appeal.

Delay in filing the appeal was condoned on the basis of a sworn explanation that the receiving employee had left without handing over the papers, with the tribunal treating the cause as sufficient and declining a strict or pedantic approach in the absence of gross negligence. On interim relief, the appellant made out a prima facie case that mere space selling was not taxable as advertising agency service, relying on a Board circular and supporting tribunal rulings, and waiver of pre-deposit was granted with recovery of service tax and penalty stayed pending disposal of the appeal.

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Issues: (i) Whether the delay of 42 days in filing the appeal should be condoned. (ii) Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery of service tax and penalty.

Issue (i): Whether the delay of 42 days in filing the appeal should be condoned.

Analysis: The delay was supported by an affidavit stating that the employee who received the impugned order had left the organisation without handing over the relevant papers. The explanation was accepted as a sufficient cause, and strict or pedantic scrutiny was not considered appropriate in the absence of gross negligence.

Conclusion: The delay was condoned and the COD application was allowed.

Issue (ii): Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery of service tax and penalty.

Analysis: The dispute concerned whether mere space selling could be treated as taxable advertising agency service. Reliance was placed on the Board circular clarifying that mere space selling does not fall within advertisement services, along with supporting tribunal rulings. On that basis, the appellant was found to have shown a strong prima facie case for interim relief.

Conclusion: Waiver of pre-deposit was granted and recovery of the service tax and penalty amounts was stayed until disposal of the appeal.

Final Conclusion: The interim applications were decided in favour of the appellant, with condonation of delay and protection against coercive recovery pending final hearing.

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