By TIOL News Service

MUMBAI, AUG 21, 2015: THE appellant had produced a programme titled "Antakshari" for Star India and received consideration from them but did not discharge the service tax liability under the category of "Programme Producers Service".

The alleged evasion of service tax was noted by the department and on being pointed out the appellant paid the same along with interest.

Not content, SCN was issued and the adjudicating authority confirmed the demand raised along with interest, appropriated the amounts paid by the appellant and also imposed penalties u/ss 76 and 78 of the Finance Act, 1994.

Against this order, the appellant is before the CESTAT and submits that the period involved is period February to August 2007 &SCN was issued on 08.10.2007; that the appellant was required to file the returns by 25.04.2007 and for the period April 2007 to September 2007, by 25.10.2007;that appellant had filed the returns with the authorities but due to financial crisis could not deposit the amount with the Central Government; that there is no suppression of fact with intent to evade service tax; that the appellant having discharged the entire service tax liability and the interest thereof, they plead leniency from imposition of penalties.

The AR submitted that the appellant had received the value of taxable service along with service tax and despite that had not deposited the amount of service tax with the Govt. of India; that financial crisis cannot be a reason for delay in payment of tax; that appellant had utilized the service tax amount collected from the client for their business purposes which attracts penal action.

The Bench observed -

Merits:

Agreement entered by appellant with Star India very categorically STATES that appellant was commissioned for producing the programme "Antakshari" for Star India. In view of this we hold that the service tax liability and interest thereof are correctly determined by the adjudicating authority and we also note that the appellant is not seriously contesting the service tax liability.

Penalties:

s.76 & 77 of FA, 1994:

Appellant had filed ST-3 returns for the period February to March 2007 and from April to September 2007 to the authorities, indicating therein the taxable services provided by them and the service tax amount charged and collected by them from service recipient. In our view the penal provisions of Section 76 and 77 would be clearly applicable in the facts and circumstances of this case. The adjudicating authority is correct in invoking the provisions of Section 76 and 77 for imposing the penalties. …To that extent the appeal stands rejected.

s.78 of FA, 1994:

If appellant had recorded the amount in their Books of Accounts as service tax collected by them and filed returns indicating therein the amounts involved as service tax, it cannot be said that the provisions of Section 78 of the Finance Act would be applicable in as such there is no intention to evade service tax liability. In our view the provisions of Section 78 do not get attracted in the case in hand. Accordingly, we by invoking the provisions of Section 80 of the Finance Act, 1994, set aside the penalty imposed by the adjudicating authority under Section 78 of the Finance Act, 1994.

The appeal was disposed of.

(See 2015-TIOL-1752-CESTAT-MUM)