High Court directs Tribunal to restore appeal on service tax for hoarding space sales. Timing of consideration clarified.

The High Court directed the Tribunal to restore an appeal related to the payment of service tax on hoarding space sales. The dispute centered on whether service tax was payable when consideration was received before the levy came into effect. The Tribunal ruled that as per the Finance Act, 1994, service tax is applicable when consideration is received, and since it was received before the levy, the tax was not payable. The impugned order was set aside, and the appeal was allowed, clarifying the timing of consideration in determining tax liability under the Finance Act, 1994.

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Issues:
1. Restoration of appeal and decision on merit.

Analysis:
The judgment deals with a miscellaneous application for restoration of appeal against a Final Order. The appeal was initially rejected along with CoD and stay applications. The High Court directed the Tribunal to restore the appeal and decide it on merit. The appeal was restored with the agreement of both parties and heard for a decision on merit.

The dispute arose when the Municipal Corporation of a city floated a tender for the sale of space for hoarding in public places. The auction for the tender was conducted before the levy of service tax came into effect. The Revenue contended that service tax was payable on the amount received by the Corporation for the hoarding space. The Corporation argued that as the consideration was received before the levy came into existence, no service tax was payable.

The Revenue argued that since the service was provided during the period when the levy was in effect, the Corporation was liable to pay service tax. Additionally, the Revenue opposed the Corporation's attempt to shift the tax liability to their licensee through a contract, which was deemed impermissible under the Finance Act, 1994.

After considering the arguments from both sides and reviewing the facts, the Tribunal noted that the consideration for the service was received before the levy of service tax came into effect. As per Section 67 of the Finance Act, 1994, the service is taxable from the time the consideration is received. Since no consideration was received after the levy came into effect, the Tribunal held that the levy of service tax could not be sustained. Consequently, the impugned order was set aside, and the appeal was allowed.

This judgment clarifies the application of service tax in cases where consideration is received before the levy comes into effect. It emphasizes the importance of the timing of consideration in determining the tax liability and upholds the principle that service tax is applicable when the consideration for the service is received, as per the relevant provisions of the Finance Act, 1994.

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