Agent's Tax Payment Relieves Principal's Liability | Precedent-Based Appeal Success

The Tribunal allowed the appeal, holding that if the tax liability is discharged by the agent on behalf of the principal, it is deemed sufficient for the principal's service tax liability. Relying on precedent, the Tribunal granted relief to the appellant, referencing a similar case involving Ms. Katrina R. Turcotte. The stay application was also decided in favor of the appellant.

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Issues:
1. Appeal against order-in-appeal No. BR/90/2012 dated 06/09/2012 passed by Commissioner of Central Excise, (Appeals), Mumbai.

Analysis:
The appellant, a well-known Indian Cricketer, entered into a tripartite agreement where his agents negotiated with corporates on his behalf for promotional services. A notice demanding service tax from the appellant was issued, contending that he was the service provider and the service tax paid by his agents did not discharge his tax liability. The demand was confirmed by an order dated 17/11/2009, imposing penalties under Section 76, 77 & 78 of the Finance Act, 1994. The appellant's appeal before the lower appellate authority was dismissed, leading to the current appeal.

The appellant's consultant argued that as per Section 65(7) of the Finance Act, 1994, the agent is considered part of the assessee, and since the agents discharged the service tax liability, it constituted payment by the appellant. Citing a precedent involving Ms. Katrina R. Turcotte, the consultant contended that service tax liability discharged through agents is sufficient, and no additional demand can be made on the principal for the same transaction. The Addl. Commissioner (AR) agreed with this interpretation, referencing the Katrina R. Turcotte case.

After considering the arguments, the Tribunal concluded that if the tax liability has been discharged by the agent on behalf of the principal, it is deemed sufficient for the principal's service tax liability. Relying on the precedent set by the Katrina R. Turcotte case, the Tribunal allowed the appeal and any consequential relief. The stay application was also disposed of in favor of the appellant.

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