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of <h1>Ad Agency Not Liable for Service Tax: Tribunal Rules in Favor of Mediator</h1> <h3>Triton Communication Pvt Ltd Versus C.S.T. -Service Tax - Ahmedabad</h3> Triton Communication Pvt Ltd Versus C.S.T. -Service Tax - Ahmedabad - TMI Issues:1. Whether the appellant is liable to deposit the service tax collected from clients under the category of 'Broadcasting Service' with the governmentRs.2. Whether the demand for service tax is time-barredRs.3. Whether the appellant's role as a mediator in collecting and passing on the service tax to broadcasters exempts them from liabilityRs.4. Whether the demand for service tax amounts to double taxationRs.Analysis:Issue 1: Liability to deposit service tax collected under 'Broadcasting Service':The appellant, an advertising agency, was involved in purchasing time slots from electronic media, receiving agency commission, and selling these slots to clients for screening advertisements. The dispute arose regarding the classification of their activities under the Broadcasting Service category. The Commissioner demanded service tax under various sections of the Finance Act, contending that the appellant collected service tax from clients but failed to pay it to the government. The Tribunal analyzed the provisions of Section 73A of the Finance Act and concluded that the appellant acted as a mediator, passing on the collected service tax to broadcasters who deposited it with the government. As the appellant did not retain any service tax amount, the demand for depositing service tax with the government was deemed incorrect.Issue 2: Time-barred demand for service tax:The appellant argued that the show cause notice was issued beyond the limitation period, asserting that all relevant information was available to the department. The Tribunal did not delve into the time bar issue as the case was decided on merit.Issue 3: Role as a mediator and exemption from liability:The appellant contended that they functioned as a facilitator between broadcasters and clients, passing on the service tax collected to the broadcasters. The Tribunal observed that the appellant's role was akin to a mediator, and as they did not retain any collected amount, the demand for service tax under Section 73A was deemed unsustainable.Issue 4: Double taxation and demand for service tax:The appellant argued against double taxation, emphasizing that the broadcasters had already paid the service tax to the government. The Tribunal agreed that demanding service tax from the appellant would lead to double payment, as the broadcasters had already fulfilled their tax liability. Consequently, the impugned order was set aside, and the appeal was allowed.This detailed analysis of the judgment highlights the key legal arguments, interpretations of relevant provisions, and the Tribunal's decision on each issue raised in the appeal.
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