2026-VIL-1567-CESTAT-BLR-ST
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SERVICE TAX CESTAT Cases

Service Tax - Taxability of hoarding rental and sale of space for advertisement to advertising agencies, Applicability of extended period of limitation under Finance Act 1994, Requirement for positive act of suppression with intent to evade tax - The Appellant rented hoarding space to advertising agencies for displaying advertisements - Service tax demand under the heading of Advertising Agency Service for period up to 30.04.2006 at Rs.44,65,842 and under the heading of Sale of Space or Time for Advertisement Service for period from 01.05.2006 - Appellant contended that where hoarding is rented to advertising agencies, the advertising agency is the service provider liable to pay tax, not the hoarding owner - Whether the demand confirmed by invoking extended period of limitation is sustainable when there is no allegation of positive act of concealment and the entire demand is derived from statutory records maintained by the Appellant filed in regular returns with no clandestine activity - HELD - For the period up to 30.04.2006 the issue is covered by the Tribunal's decision that mere sub-letting site to an advertising agency without providing services of the nature defined under the Finance Act would not make the service provider liable to pay service tax. As regards demand after 01.05.2006 it is of revenue-neutral situation as the Appellant was paying service tax wherever hoarding or space was provided to persons other than advertising agency and not paying tax where service was provided to advertising agencies since the agency was paying tax including the amount paid to them for leasing the hoarding or space - The show cause notice does not allege any positive act of concealment and the entire demand is derived from statutory records maintained by the Appellant. A mere bald allegation of suppression cannot be ground to invoke the extended period as established law requires positive act of suppression with intent to evade. The issue is one of interpretation and not solely procedural and there were conflicting judicial views regarding tax liability on this issue. Since the SCN was issued beyond the normal period of limitation, the demand confirmed by invoking extended period is unsustainable - The impugned order is set aside and the appeal is allowed
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