2013 (11) TMI 1499 - AT - Service Tax

Tribunal Upholds Service Tax Liability, Rejects Waiver Request, Emphasizes No Immunity

The Tribunal upheld the decision of the Commissioner (Appeals), holding the petitioner liable to remit service tax. The petitioner's request for waiver of ... Levy of service tax on advertising services - Proceedings were initiated against the petitioner for having failed to disclose the consideration received for providing taxable advertising services during the period October 2006 to March 2010 - Remission service tax of the entire amount of 15% commission received from departments, local bodies, organizations in the State of Rajasthan, during the period in issue - Held that:- prima facie there is any infirmity in the order of the Commissioner though the ld. Counsel for the petitioner has pleaded that the entire liability is revenue neutral. If under the provision of the legislation a taxable event had occurred and the provisions enjoin tax liability on the petitioner, it cannot claim immunity on the ground that M/s Rajasthan Samvad had in any event remitted the tax on the gross amounts received by it, part of which was paid to the petitioner as commission, under agreements entered into between the petitioner and M/s Rajasthan Samvad. It requires to be noticed that Commissioner (Appeals) does not impose any penal liability - Assessee directed to make a pre deposit - Stay granted partly. Issues:1. Dropping of proceedings for levy of service tax based on a letter produced by the petitioner.2. Reversal of adjudication order by the Commissioner (Appeals) holding the petitioner liable to remit service tax.3. Relief sought for waiver of pre-deposit and stay of further proceedings for recovery of adjudicated liability.Analysis:Issue 1: Dropping of proceedings based on a letterThe respondent adjudicating authority dropped proceedings initiated for the levy of service tax after the petitioner produced a letter from M/s Rajasthan Samvad stating that they had remitted service tax on the gross amount received for advertising services. The authority held that since M/s Rajasthan Samvad had already remitted the tax, the petitioner was not liable to pay again.Issue 2: Reversal of adjudication order by Commissioner (Appeals)The Commissioner (Appeals) reversed the adjudication order, holding the petitioner liable to remit service tax under the relevant provisions of the Finance Act, 1994. It was determined that the petitioner failed to remit the tax with an intention to evade, and the liability of the petitioner to pay tax was not immunized by the fact that M/s Rajasthan Samvad had remitted tax on the gross amounts received.Issue 3: Relief sought for waiver of pre-deposit and stay of proceedingsThe petitioner sought waiver of pre-deposit and stay of further proceedings for recovery of the adjudicated liability following the order of the Commissioner (Appeals). The Tribunal rejected the stay application, directing the petitioner to deposit the adjudicated liability within a specified period, failing which the appeal would stand dismissed. The Tribunal emphasized that the petitioner cannot claim immunity from tax liability based on the remittance by M/s Rajasthan Samvad.In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) holding the petitioner liable to remit service tax and rejected the petitioner's request for waiver of pre-deposit. The petitioner was directed to deposit the adjudicated liability within a specified timeframe, failing which the appeal would be dismissed.