Model not liable for service tax when agent pays: Tribunal decision on Business Auxiliary Service vs Advertisement Agency Service

The Tribunal held that the appellant, a model, fulfilled her service tax liability through her agent, Matrix, who was responsible for paying the tax on her behalf. Despite the activity falling under Business Auxiliary Service, Matrix's payment under Advertisement Agency Service did not absolve the appellant of liability. The Tribunal concluded that the appellant had discharged her tax obligations through Matrix, setting aside the demands confirmed against her. The appeal was allowed, and consequential relief was granted.

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Issues:
Demand of service tax under Business Auxiliary Service for the period 01.05.2006 to 09.09.2004 confirmed against the appellant along with interest and penalties.

Analysis:
The appellant, a model, was alleged to have provided services for promoting clients' products without paying service tax. Show-cause notices were issued, and demands were confirmed against the appellant. The appellant argued that her agent, Matrix, was responsible for receiving payments and discharging service tax on her behalf. The appellant contended that the service tax liability had been discharged by Matrix under Advertisement Agency Service, even though the activity fell under Business Auxiliary Service. The Revenue argued that the appellant had not paid service tax herself, and Matrix's payment under a different category did not absolve the appellant of liability.

The Tribunal considered the appellant's role in promoting products through various media and agreed that the activity fell under Business Auxiliary Service. However, the appellant had appointed Matrix as her agent to handle payments and discharge service tax. The Tribunal noted that under the agreements, Matrix was responsible for paying service tax on the appellant's behalf. The Tribunal held that Matrix's payment under Advertisement Agency Service did not negate its role as the appellant's agent for discharging service tax liability. The Tribunal emphasized that the appellant, as the "assessee," had appointed Matrix as her agent, and Matrix had indeed discharged the service tax liability on her behalf.

Based on the above analysis, the Tribunal concluded that the appellant had fulfilled her service tax liability through her agent, Matrix. Therefore, the proceedings against the appellant, including the demands confirmed in the impugned order, were deemed unwarranted. The Tribunal set aside the impugned order and allowed the appeal, providing consequential relief if necessary.

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