Whether the appellant suppressed the material facts with intent to evade payment of service tax?

PJ/Case Laws/2012-13/1207

Case:- M/s SAS ADVERTISERS Vs COMMISSIONER OF CENTRAL EXCISE, MYSORE

Citation: - 2012-TIOL-1093-CESTAT-BANG
Issue: - Whether the appellant suppressed the material facts with intent to evade payment of service tax?

Brief fact: - The Appellant obtained land from the Municipal Corporation of Bangalore on a rental basis and erected cantilevers. The Corporation utilizes one side of the cantilever and the assessee can utilize the other side of the cantilever to generate revenue by way of renting out that space for the purpose of advertisements. The dispute in the present case is with regard to the transaction of the appellant with one such advertising agency namely M/s Clear Channel Communications Pvt. Ltd. (Clear Channel, for short).The Memorandum of Understanding between the appellant and Clear Channel, dated 28/12/2005. The agreement indicates that the cantilevers erected by the appellants on the municipal property were handed over to Clear Channel after providing electrical fittings and connections. This agreement permitted Clear Channel to use the space on the cantilevers for exclusive marketing purposes and also categorically stated that such space could be used by Clear Channel for their clients for display of advertisements. On the basis of the terms and conditions of this agreement, the department took the view that the transaction between the appellant and Clear Channel was in the nature of rendering of the aforesaid service by the former to the latter. This view made its way into a show-cause notice which invoked the extended period of limitation for recovery of service tax from the appellant for the aforesaid period.

The Appellant filed application seeking waiver and stay in respect of an amount of Rs.14,04,481/- demanded as service tax and education cesses for the period from May 2006 to March 2007 as also penalties imposed on the appellant. The impugned demand of service tax is under the Head “Sale of space/time for advertisement” service.

Appellant Contention: - The learned Consultant for the appellant has claimed prima facie case against the demand both on merits and on the ground of limitation.

The appellant pleaded inter alia that it was their bona fide belief that they were not liable to pay service tax on the activity undertaken under the aforesaid Memorandum of understanding, for Clear Channel. One of the reasons for the bona fide belief, stated by the appellant, was that Clear Channel paid service tax under the same Head in respect of the sale of space of the cantilevers.

Reasoning of Judgment: After examining the records and considering the stay order cited by the learned Dy. Commissioner (A.R.) viz. Bhopal City Link Ltd. Vs. Commissioner of Central Excise, Bhopal [2009(15) S.T.R. 301 (Tri-Del) = (2008-TIOL-2089-CESTAT-DEL), Tribunal is of the view that the appellant has no prima facie case on merits. However, they seem to have a case on the ground of limitation.Therefore,Tribunal has not found any specific finding on this plea of bona fide belief, apart from a broad averment to the effect that the belief did not merit consideration. In this scenario, Tribunal are inclined to accept, for the present limited purpose, the plea of limitation advanced by the learned consultant. In the result, there will be waiver of pre-deposit and stay of recovery in respect of the adjudged dues.

Decision:- Stay Granted.

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PJ/Case Laws/2012-13/1207

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