Departmental Appeal: Dismissed as unsubstantiated and not perused diligently.

Service Tax: Valuation: Advertising Agency Services: Remand: Find force in the contentions advanced on behalf of the appellants that the matter requires to be remanded to the adjudicating Commissioner since he has not considered the cited circular dated 1.11.2006 while adjudicating the case and deciding about the applicability of the extended period of limitation in respect of the appellants. Accordingly, set aside the impugned order and remand the matter for fresh decision by the adjudicating Commissioner. (para 5)

Service Tax: Advertising Agency Services: Payment of tax by main advertising agency: Remand: After setting aside the impugned order, the matter is remanded back to the original authority to verify whether the main contractor has discharged their service tax liability and to pass appropriate order after giving a reasonable opportunity to the appellants to present their case. (para 7)

Service Tax: Advertising Agency Services: Pre-deposit: Circular dated 19.6.06 clarifies that mere publishing of prepared advertisement in a paper or magazine or broadcast of prepared advertisement on electronic media by TV are not functions of an Advertisement Agency. In the case of Ajanta Fabrication wherein the assessee was assigned the work for preparation and fixing of signage, this Tribunal has held that the said activity is not covered under the "Advertising Agency Services". The applicant has made out a strong prima facie case for waiver of entire service tax, interest and various penalties. (para 7,8)

Service Tax: Service rendered by Sub-Contractor: Pre-deposit: The prime advertising agency has already paid the service tax. Asking the applicant to pay service tax on the advertising materials etc. would amount to the service tax twice as held in the case of Urvi Construction (supra) and in the case of BBR (India) Ltd. (supra). The applicant has been able to make out a prima facie case in her favour. (para 4)

Service Tax: Advertising Services: Cenvat Credit: Input: Stay: All goods except light diesel oil, high speed diesel oil and motor spirit, are eligible for availment of Cenvat credit. The appellant has made out a prima facie case for waiver of pre-deposit of the amounts adjudged by the adjudicating authority and upheld by the Commissioner (Appeals). (para 5)

Service Tax: Advertising Agency Service: Refund: Bar of Limitation: Since both sides agree that the refund would be governed by the limitation period prescribed under Section 11B, it is only the refund claim of Rs. 82,544/- of the service tax for the month of July 02 paid on 16.8.02, which would be hit by time bar and the remaining claim would be within time. In view of this, the Commissioner (Appeals)'s order is incorrect only to the extent It has allowed the refund claim of Rs. 82,544/- of service tax paid on 16.8.02. The Revenue's appeal is allowed only to this extent and the Commissioner (Appears)'s order stands modified as above. (para 3)

Advertisement Agency: Sub-Contract: Once the Advertisement Agency pays the service tax, no service tax shall be payable by sub-contractors. As the evidence relied upon was not placed before the Original Authority, remand the matter for fresh adjudication.

Review Proceedings: No order under Section 84 can be passed ‘after the expiry of two years from the date on which the order sought to be revised has been passed’.

Gross amount: When no tax is collected separately, the gross amount to be adopted to quantify the tax liability treating it as value of taxable service plus service tax payable. From 18.4.2006 this principle has been legislated under section 67(2) of the Finance Act, 1994, as amended.

Discount v/s Commission : The Department demanded service tax on the amount of discount considering it as earning. Prima facie the same is only a pricing mechanism and what they actually receive from their clients (commission) (which ranges from 2.5% to 15%) is the service charges received by them. Waiver of pre deposit of the dues granted.

Advertising Agency Services: There can be no demand of service tax on a person in the category of “advertising agency” unless it is established that such person conceptualized and designed the advertisement matter displayed on hoardings etc. Full waiver granted.

Advertising Agency: Appellants did not design, visualise or conceptualise any advertisement to be displayed/exhibited on the banners, traffic sign board, traffic barricade or hoarding, they cannot be said to have made or prepared any advertisement and, therefore, they did not fall within the scope of the definition of advertising agency. Appeal allowed.

Cum duty price : Plea of cum duty price for recomputing the demand based on the decision of the Hon’ble Supreme Court in the case of Commissioner v. Maruti Udyog - 2005 (179) E.L.T. A102 (S.C.). Matter remanded back for recomputation.

Sub-Contractor : Once the main advertising agency has paid the Service Tax, then the sub-contractor is not liable to pay the Service Tax. On the basis of large number of judgments it is settled issue that amounts shown in the Income Tax returns or Balance Sheet are not liable for Service Tax.

Service tax on discount : If the media gives discount of 15% to the appellant, that amount has nothing to do with the gross amount received by the appellant from their clients to whom they rendered advertisement services. Therefore, there is no logic in demanding service tax on the discount of 15% received by the appellant from print media.

Stay: Advertising Agency: Service was introduced for the purpose of levy of service tax with effect from 1-5-2006 only and therefore the appellants have no liability to honour the above demand for the prior period. Appellant providing space on MTC buses on rent for display of advertisement. Issue covered by Tribunal’s own decision. Stay granted.

Advertising Agency Service : Appellants collected rentals in respect of hoardings owned by them for advertisement purposes.  Demand of Rs.1,49,225/- was confirmed. It was found from show cause notice that the appellants had collected an amount of Rs. 37,589/-from various clients towards Service Tax and had not remitted the amount to the Government. In these circumstances, order modified to confirmation of demand to Rs. 37,589/- towards Service Tax. Since the amount had been collected in the form of Service Tax, even without taking out Service Tax registration, the appellants are liable for penalties and interest.

Advertising Agency : Mere manufacturing the product as per the instructions and specifications of the job work would not amount to rendering the service which can fall in the category of ‘advertising agency’. All the activities mentioned in the definition of ‘advertising agency’ were not carried out by the appellant, and the ratio of the decision in the case of Zodiac Advertisers v. Commissioner of Central Excise, Cochin  and Calcutta Commissionerate Trade Notice relied upon.

Advertising Agency : Any amount received by the service provider from his client only is liable to service tax and not amounts received from others.

Service Tax: Review of OIO by Commissioner: Remand: Assistant Commissioner has accepted plea pertaining to the amounts paid by the assessee at Bangalore. However, the Commissioner found fault in the acceptance on the ground that the adjudicating authority did not actually quantify the taxable value and service tax liability based on the gross receipts shown in the Income-tax Returns and Profit & Loss Account after allowing the deduction of amount paid to print media. Commissioner should have remanded the matter back to the original authority to re-work by giving proper direction. The appellant's contentions have not been discussed. The matter is remanded to the original authority to re-work out the tax after considering all the pleas raised by the assessee along with evidence.(Para 5).

Appeal allowed by remand.
 

Service Tax: Advertising agency: Scope and liability: Neither of the clause of the agreement enjoined preparation of advertisement or advertising material in any manner so as to bring it under the levy of Service tax. Inasmuch as the activities undertaken by the present appellants are synonymous with the activities undertaken by M/s. Zee Telefilms Ltd., The case of Zee Telefilms squarely covers the present matter. Similar view was taken in the case of Siticable Network P. Ltd. v. C.C.E., Mumbai - 2006 (4) S.T.R. 555 (Tri.-Mumbai) =STO 2006 CESTAT 742 laying down that flashing or display in media of prepared advertisement is not advertising service but broadcasting service which was brought under the service tax net w.e.f. 16-7-2001. As such, the disputed issue is squarely settled in favour of the appellant(Para 3,4).

Appeal allowed.:
 

Advertising Service: The appellant is not equipped for functioning as an advertising agency. The services rendered by it do not part take of or include the services (designing, conceptualising, visualizing) normally rendered by an advertising agencies. The extended definition cannot bring entirely alien and unconnected services or a manufacturing activity within the scheme of levy on service.

Service Tax: Advertising agency: Scope and liability: Service rendered to other agency: The definition of taxable service as per Section 65(105)(e) read as: "Taxable Service means any service provided to a client by an advertising agency in relation to advertisement, in any manner." While dealing with the question, whether the advertising agencies to whom services were rendered and from whom money was collected as publicity charges would merit to be called as clearance. Commissioner made the observations in Para 6.3 of the impugned order: "6.3 As per the definition supra it is observed that the word 'client' has not been defined under the provisions of Act ibid. However, a client, for the purpose of the 'Service Tax' taxation principles, can be considered to be a person who is receiving the taxable services, provided by the service provider against a consideration. Thus, the requisite stipulations of being a client are satisfied in the instant case as it is observed that the assessee in the normal course of rendering advertising services provided it to a 'client', who happens to be another advertising agency. However, it cannot be said that other advertising agency cannot be treated as a client just because he is another such agency. Incidentally, the other advertising agency in turn is providing advertising services to its own client. The categorization of client is a futile exercise as the definitions supra do not call for such interpretation. It is also not the case where the assessee is claiming that the clients, incidentally the other advertising agencies, who are availing such services, are not being charged for the same. Prime facie no good case for waiver (Para 2,3).
Pre-deposit ordered

Service Tax: Advertisement agency services: Penalty: They are liable to deposit the Service tax collected by them for the quarter after they receive payment from their clients. This specific provision is found in Rule 6(1) of the Service Tax Rules, 1994. Lower authorities should consider the plea of the appellant regarding applicability of provisions of Rule 6(1) of the Service Tax Rules, 1994.(Para 4).

Appeal allowed by way of remand.
 

Service Tax: Advertising Agency: Taxable value: Under Section 67(d) gross amount charged by an advertising agency from the client for services in relation to advertisement is the measure, and the discount granted by the media to the advertising agency is of no concern for valuation.(Para 3).

Stay application allowed.
 

Advertising Agency: Stay: the service tax is levied on the advertising charges paid by the clients of the appellants, while this cash discount is not paid by the clients but they received the same from the media to whom the advertisements are booked. There is no direct link between the cash discount and the advertising charges collected by the appellants from the clients. Prima facie, the ground taken by the appellant is sound and requires to be accepted.

Service Tax: Advertising services: Demand: Remand: According to the appellant, there was no liability to pay service tax in view of the fact that credit notes were issued to cancel various invoices. This contention was also taken up before the appellate authority. The appellate authority without verifying whether any such credit notes uphold the order of the Deputy Commissioner. Appellant did not get sufficient opportunity to establish before the adjudicating authority the genuineness of the credit notes. The impugned order cannot, be sustained and is hereby set aside with a direction to the Deputy Commissioner (Service Tax) to consider the matter afresh(Para 3,4,5)

Appeal allowed by way of remand.
 

Advertising Agency: The appellants who merely manufacture screen printed products as per the directions of the advertiser, cannot be called as an Advertisement agency in the absence of any creative activity and services relating to preparation, making and display of advertisement on his part.

Advertising Agency: Appellants hired their hoardings to advertising agency who in turn displayed or exhibited their advertisement on such hoardings. The issue covered in decision of Tribunal in the case of CCE, Ludhiana v/s Azad Publications. Demand of service tax dropped.

Service Tax: Advertising agency: Scope and taxability: The party was doing preparation for advertisements also, by virtue of which the services rendered by them to their clients would qualify for Service Tax. After a close perusal of the definitions and the statement given by the proprietor (which was never retracted by him, nor clarified by him) there is no reason, to find fault with the view taken by the authorities below. The appellants, therefore, has not made out a prima facie case.(Para 2,3).

Partial pre-deposit ordered.

Advertising Agency: The demand of Service Tax is on the amounts received for activities undertaken for the principals (who are broadcasting agencies not having office in India), as an 'advertising agency' service provider. Once a phrase or expression is defined in a statute, that definition alone will entirely apply whenever that phrase or expression is employed in the body of the statute. the appellants have no contract or agreement with an advertiser. The appellants agreement is with foreign broadcasters/agencies. The appellants render service to such foreigners and get paid by them. They can never be said to be rendering a service to producer of goods or services. Appellant's are liable to Service Tax under the heading "broadcasting agency" with effect from 16-7-2001 and value of taxable service would be the entire amount received from an advertiser excluding the commission retained by an advertising agency, if they are a 'Broadcasting Agency' after 16-7-2001 they were so even earlier to that date as there is no change/alteration in the activity they are/were engaged prior & post 16-7-01.

Advertising Agency: It is not clear as to how the Revenue can impose Service Tax on expenses incurred.The Board in its circular has clarified that certain agencies are engaged in canvassing for advertisements for which they get commission from the publishers. It has been clarified that if the canvassing is limited to space selling then such services would not be liable to any Service Tax.

Service Tax: Advertising agency: Scope and taxability: Appellants are not just engaged in manufacture of signages and selling them but they have also rendered certain service of installation and display of the advertisements, which are specifically brought under Section 65(90)(e). Authorities below which have correctly held that by making the sign board as well as in installing the same at specified places for display, the appellants have rendered a taxable service, under the definition of "advertising agency".(Para 4).

Appeal dismissed.

Financial hardship Not pleaded: Pre deposit ordered: Matter is arguable and that the appellants do not have a prima facie case in their favour for complete waiver of pre-deposit. Appellant have also not pleaded any financial hardship. Subject to, compliance with the directions, waiver of the pre-deposit of the balance duty and entire penalty.

Service Tax: Advertising Agency: Demand: Waiver of pre-deposit: Whether the services rendered, namely, media planning & budgeting, and evaluation sales strategy development, analysis and interpretation of NRS/IRS Data, presentation development on latest NRS data and media consultancy would come within the scope of the services rendered by an advertising agency, is something on which no prima facie view can be expressed(Para 2).

Pre-deposit ordered.

Stay : Condonation of delay : The appellant has filed an Affidavit explaining the reasons inasmuch as the concerned employee who received the impugned order left the job without handing over the relevant papers. Delay condoned. the appellants have not carried out any activity relating to advertisement services. They were only providing the space for the advertisement which does not fall within the category of advertising agency. Waiver granted.

Demand: Penalty: The appellants are not disputing that they are receiving commission. The only contention of the appellant is that they are giving some incentive or rebate to their customers, there is no evidence in support of this claim. Issue involves regarding quantum of amount on which Service Tax is to be paid. Demand is confirmed.

Service Tax: Advertising Agencies: Waiver of pre-deposit: In the light of earlier order of the Tribunal in the applicants own case and in the light of the decision of the Madras High Court in the case of Advertising Club v. Central Board of Excise & Customs - STO 2001 Mad 180, a strong prima facie case for total waiver on merits has been made out by the applicants(Para 3).

Pre-deposit waived.

Advertising Agency : advertisement includes any hoarding and advertising agency means any commercial concern engaged in providing any service connected with the display of advertisement. Admittedly, the appellant is an advertising agency engaged in advertisement of various products for which purposes they are listed with the Central Excise department and were paying the service tax. No distinction has been made in respect of the services provided to a private person or to State/Central Government agencies.

Service Tax: Advertising agency: Demand: View point of the Commissioner (Appeals) cannot be accepted in terms of the ratio of law laid down in the case of C.C.E., Ludhiana v. Gypsy Advertising Co. reported in STO 2004 CESTAT 46 wherein it has been observed that the advertising agency is liable to pay Service Tax as they stand covered under the provisions of the Service Tax.(Para 2).

Revenue appeal allowed.
 

Service Tax: Services of advertisement: Demand: Appellants are only acting on behalf of Times of India for selling the printed space. It is not the case of the Department that the appellants are making or preparing advertisement, they are only engaged in the service which is known as space selling. The Board, vide Circular No. 64/13/2003-S.T., dated 28-10-2003 clarified that an agency undertakes merely job of bringing the order for an advertisement and does not undertake any further activity, it would not fall within the definition of advertising agency and will not be subjected to service tax.(Para 3).
Appeal allowed.
 

Advertisement Service: Technology transfer and receipt of payment for the same is distinguishable from "Consulting Engineering Services". Merely renting out Unipole on rental basis not liable for service tax.

Advertising Agency: The advertisements to be displayed on the billboard installed and maintained by the respondents were designed by PESICO.  Appellants only received rent for advertisement site.
In the case of persons, who are printing and publishing telephone directories, Yellow pages or business directories, their activity is essentially of printing a ready-made advertisements from the advertisers and publishing the same in the directory. Their activities are similar to those carried out by newspaper or periodicals. As such, this activity shall not attract service tax. Demand set aside.

Service Tax: Refund: Unjust enrichment: Appellant having passed on the incidence of duty to his customers has no locus standi to claim refund of duty wrongly paid. Passing on credit notes does not mean that bar of unjust enrichment does not apply. This issue was decided in the decision of a Larger Bench of the Tribunal in the case of STO 2003 CESTAT 192. The refund has been rightly rejected on this ground. The lower authority's findings that the appellant is not merely engaged in printing and publishing advertisements. He is also engaged in activity, which attract the definition of an advertising agency. The fact that he does not separately charge for these activities does not mean he does not undertake them. The bills do not indicate separately the quantum of charges for each activity undertaken by him.(Para 5,6).

Advertising Agency : The respondent has hired space in Metro Railway Coaches and in turn provides space to its client for advertisement. Such activity does not fall in the category of Advertising Agency.

Service Tax: Advertising Agency service: Scope /Demand: The definition of 'Advertising Agency' as provided under Section 65(3) of Chapter V of the Finance Act is "Advertising agency means any commercial concern engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant". The respondents are admittedly an advertising agency. They have provided space to the other advertising companies for the purpose connected with the advertisement and are charging consideration in lieu thereof from those companies. Therefore, it is not a case of mere sub-letting of a site, but it is a case where the respondents had provided service by way of letting them the site which is connected with the advertisement. It is also evident from the record that they have raised bills against two Advertising Co, but still did not discharge the service tax liability in respect of those bills.(Para 3).

Revenue appeal accepted.

Service Tax: Advertising agency service: Demand: Mere sub-letting site to an advertising agency without providing services of the nature defined under the Finance Act would not make the respondent liable to pay service tax.(Para 3).

Revenue appeal dismissed.

Service Tax: Advertising agency: Scope: Demand: The definition of "Advertising agency" includes any commercial concern engaged in providing any service connected with the making, preparation, display or exhibition of advertisements. Trade Notice No. 1/96-ST, dated 31-10-96 wherein it has been clarified that "if the film producer chooses to charge the client directly, for the film or documentary produced by him then the film producer is to be regarded as having rendered services to the client in relation to advertisement and he will, therefore, be liable to pay service tax accordingly".(Para 2). Appellants have not able to make a prima facie case in its favour so as to allow the stay petition unconditionally.(Para 3). Pre-deposit ordered.

Advertising Agency : Appellants are only manufacturing the sign boards as per the requirements of their customers. Such an activity cannot be held to be advertising agency as the appellants are not rendering any advertising service.

Service Tax: Advertising Agency Services: Fundamental Right: A fiscal statute cannot be considered to be violative of the fundamental right guaranteed under Article 19(1)(g) to carry on any profession, occupation, trade or business. By Clause (6) of Article 19, it is open to the State to make a law imposing reasonable restriction in the exercise of such right, inter alia, in public interest. It cannot be denied that imposition of tax which goes to the public exchequer is certainly in public interest. The tax levied is only five per cent of the gross consideration received and, hence, it cannot be considered to be unreasonable. (para 6)

Service Tax: Advertising Agency Services: Discrimination by only taxing some: Discretion of the Liegislature: Whom the Legislature should tax, in what manner, and to what extent, is totally left to the wisdom of the Legislature. It is not for the courts to interfere in such exercise of discretion. Interference with a fiscal statute under Article 14 must be very seldom and for explicit reasons (para 7)

Service Tax: Advertising Agency Services: On the basis of scant averments, and in the absence of material evidence, it is not possible to decide the factual controversy as to the exact nature of the business activity of the petitioner, and whether it would fall within the definition of "advertising agency". It is a matter to be decided by the assessing authority on evidence. If the activity of the petitioner is not exigible to tax, it is at liberty to demonstrate it before the assessing authority by producing material to the satisfaction of the assessing authority. (9)

Advertisement : Printing of yellow pages does not attract service tax as per clarification issued by Ministry of Finance on 16.8.1999 : Matter remanded back.

Service Tax - Intention of Legislature : Speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted.

Service Tax Constitutional validity : The constitutional validity of the taxing provision could not be decided on the basis of the "measure of the tax"

Advertising Services: Even if the Board circular can be said to be  under the Act, it does not have the effect of overriding or detracting from any of the provisions of the Act. Central Board of Revenue cannot detract from the legal position. Circular in the present case is innocuous. Writ appeal rejected as the Commission earned by the agency forms a part of gross income and is a Taxable Service.

Printing of Labels : Whether it is akin to printing of films to be seen at final hearing stage : Directed to deposit entire penalty in two months and matter remanded back to lower authority.

Advertising Agency Services: Board Circular M.F. (D.R.) Letter F. No. 341/43/96-TRU, dated 31-10-1996 does not ultra vires the provisions of the Constitution of India, nor is it against Section 95 of the Finance Act.

Advertising Services: There is a clear distinction between the advertisement and the advertising services. The Court has very little scope to interfere on the rate of tax. This is not a tax on any profession, trade, calling or employment, but is in respect of the service rendered.