Tribunal remands case for service tax re-computation and personal hearing, allows appeal for re-computation.

The Tribunal remanded the case to the Original Authority for re-computation of service tax liability for advertising services, directing a personal hearing and imposition of suitable penalties. The appellants' appeal was allowed on the grounds of re-computation, with a new order to be issued within four months from the final order date.

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Issues:
1. Computation of service tax liability for advertising services.
2. Appeal against Order-in-Appeal No. 70/2006 dated 20.03.2006.
3. Demand for service tax from 1998-1999 to 20.3.2003.
4. Grounds for reducing service tax liability.
5. Request for re-computation of service tax liability by the Original Authority.

Comprehensive Analysis:

1. Computation of Service Tax Liability:
The dispute in this case primarily revolves around the computation of the service tax liability for advertising services provided by the appellants. The Adjudicating Authority confirmed a demand of Rs 6,59,883, while the appellants argued that their admitted liability is only Rs 4,25,306. The appellants contended that the taxable amount should be inclusive of tax and not exclusive of service tax liability. They relied on the decision of the Hon'ble Supreme Court in the case of Commissioner Vs. Maruti Udyog to support their argument that the amount collected from customers should be treated as cum-tax, potentially reducing the service tax liability significantly.

2. Appeal Against Order-in-Appeal:
The appeal was filed against Order-in-Appeal No. 70/2006 dated 20.03.2006 passed by the Commissioner of Customs and Central Excise (Appeals), Cochin. The Assistant Commissioner had confirmed the demand for service tax of Rs 6,72,389 for the period from 1998-1999 to 20.3.2003, and imposed penalties under various sections of the Finance Act, 1994. The Commissioner (Appeals) upheld the original order, leading the appellants to approach the Tribunal seeking relief.

3. Demand for Service Tax:
The appellants had rendered advertising services that were taxable. Despite registering in 1997, they did not pay any service tax until 10th October 2004. Subsequent investigations revealed that although the appellants collected service tax from customers, they did not remit the same to the government. This resulted in proceedings being initiated against the appellants, demanding service tax of Rs 6,72,389 for the specified period.

4. Grounds for Reducing Service Tax Liability:
The appellants presented various grounds for reducing the service tax liability. They argued that certain amounts related to film production and calendar making should not be included in the service tax net. Additionally, they disputed the inclusion of specific amounts in the computation of service tax liabilities, stating that some bills were canceled, and certain amounts were not received by the appellants but were still considered. The appellants also contended that amounts related to printing negative/positive should not attract service tax.

5. Re-computation of Service Tax Liability:
The Tribunal, after considering the contentions of the appellants, decided to remand the matter to the Original Authority for re-computation of the service tax liability based on the submissions made. The Tribunal emphasized that the Original Authority should grant a personal hearing before re-computing the service tax liability and impose suitable penalties on the appellants. The appeal was allowed by way of remand, with a directive for the issuance of a new order within four months from the date of the final order.

This detailed analysis encapsulates the key issues, arguments, and the Tribunal's decision in the legal judgment concerning the computation of service tax liability for advertising services.

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