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Finance Bill, 2014 enacted into Finance Act, 2014, Date of Enactment 06.08.2014Budget 2014-15 : Sale of space for advertising has been made taxable except for print media.Budget 2014-15 : Radio Taxis are now taxable.Budget 2014-15 : Education : The definition of Auxiliary Education Services has been scraped.Budget 2014-15 : Works Contract : 2 slab rates prescribed in place of earlier 3 slabs.Budget 2014-15 : E-payment of Service tax is being made mandatory with effect from 01.10.2014.Budget 2014-15 : POPS: Definition of intermediary is being amended to include the intermediary of goods in its scope.
Advertising Agency Services [Sec 65(105)(e)]
Effective upto 30th June 2012 
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Landmark Service Tax Judgment - Advertising Agency Services

INTRODUCED: With Effect From 1st November 1996
 
Contents
Scope
Clarification
Exemption
Relevant Notifications / Circulars
Landmark Judgements
Accounting Code
Service Tax 00440013
Interest  00440016
Penalty 00441299
 
DEFINITION:

According to Section 65 (105)(e) service provided or to be provided to any person, by an advertising agency in relation to advertisement, in any manner is a taxable service.

According to Section 65 (2), “advertisement” includes any notice, circular, label, wrapper, document, hoarding or any other audio or visual representation made by means of light, sound, smoke or gas.

According to Section 65 (3), “advertising agency” means any person engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant.

 
SCOPE:
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The provided service must be in relation to advertisement. The service provider is advertising agency including advertising consultant, liability to pay Service Tax is on Service Provider.

 
CLARIFICATION:
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ISSUE: Persons / agencies canvass advertisements for publishing, on commission basis. Such persons / agencies do not provide any other services like making, preparation, display or exhibition of advertisement. Whether merely canvassing advertisement for publishing on a commission basis by persons / agencies is classifiable as Advertising Agency service [section 65(105)(e)] or not?

SOLUTION: Merely canvassing advertisements for publishing, on commission basis, is not classifiable under the taxable service falling under section 65(105)(e). Such services may be liable to service tax under business auxiliary service [section 65(105)(zzb)].

 
SERVICE TAX EXEMPTIONS:
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(a)  Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/-  (Service Tax Notification No. 8/2008-ST dated 01.03.2008)

(b)  Services provided to the United Nations or International Organisations

(c)  Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d)  Services which are exported as per ‘Export of Services’ Rules

(e)  Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(f)  Services provided by Reserve Bank of India

(g)  Out of total value of service provided proportionate value of goods and material provided by the Service Provider

 
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
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Service Tax  CBEC Instruction Letter (F. No. 334/1/2008), dated 29-02-2008
Service Tax Circular No. 96/7/2007 dated 23-08-2007, (Clarification of Scope)
Service Tax CBEC Instruction Letter (File No. 341/43/96-TRU), dated 31-10-1996
 

 

Case Laws Related

  • STO 2013 CESTAT 1511
  • Service Tax: Advertising Agency Service: Reimbursable expenses not included in the assessable value of service: Demand: Penalty: Scope and liability: The issue whether the reimbursable expenses are to be included in the assessable value of taxable service rendered is now settled by the decision of the Larger Bench in the case of Sri Bhagvathy Traders Vs. CCE as reported in STO 2011 CESTAT 474. Earlier to this, there were divergent views on the issue. Therefore in view of the decision of the Tribunal and the CBEC's instruction, the appellant was in bonafide belief that the reimbursable expenses are not to be included in the assessable value. Therefore, in view of the provisions of Section 80 of the Finance Act, the penalties imposed in the impugned order are set aside. The appellant has provided taxable service to the Foreign Service recipient in respect of advertisement which is displayed in India. Therefore the appellants are liable to service tax for the period 1.3.2003 to 19.11.2003. The appellants are also entitled to cum-tax benefits.(Para 3,5.1,5.3).

    Appeals disposed off.

  • STO 2013 CESTAT 1150
  • Advertising Agency: Demand: Stay: Differential value: Since the reply was not a detailed reply filed by the appellant explaining/reconciling the difference between the receipt figures shown in the bank statements and the gross taxable value shown in ST-3 Return, the adjudicating authority could not examine the reasons for such differences, as now explained by the appellant: Matter remanded.

  • STO 2013 CESTAT 960
  • Advertising Agency Service: Demand: Appellant is a maker of films/motion pictures and is not an advertising agency as defined in law. During the course of making the films, their customer's brand name or logo gets projected in some of the scenes which are part of the films. Such activity of show casing the brand name or logo is covered under Section 65(105)(zzzm). Since the activity undertaken by the appellant is specifically covered under the aforesaid entry, the same cannot be classified for the earlier period under Section 65(105)(e). If that be so, the activity undertaken by the appellant would become exigible to service tax only w.e.f. 01/05/2006 and not for the prior to that. Since in the present case the period involved is much prior to 01/05/2006 the demand for service tax is not sustainable in law.

  • STO 2013 CESTAT 794
  • Advertising Agency: Cenvat Credit: Free Commercial Time: since unless the serials are broadcast, the appellant not eligible for free commercial time and the payment of service tax under the category of "Sale of space or time for advertisement". Therefore, the chain is clearly established and the appellant is entitled for cenvat credit on service tax paid towards telecast fee.

  • STO 2013 CESTAT 840
  • Advertising Agency: Charges collected by print media: If such charges are not taxable in the hands of print media it cannot be taxable in the hands of agents who just collect and remit the money to the print media.

  • STO 2013 CESTAT 465
  • Advertising Agency Service: Major amount of demand confirmed, no finding of the adjudicating authority: Matter remanded. 

  • STO 2013 CESTAT 428
  • Advertising Agency: Question of demand on broadcasting services for broadcasting services abroad: Advertisements are made by other agencies and appropriate service tax has been paid in respect of advertising agency service hence the demand confirmed under advertising agency service which is actually in respect of broadcasting, is not sustainable.

  • STO 2013 CESTAT 306
  • Advertising Agency: Advertising Consultancy: Activities such as Media plan budgeting & evaluation, sales strategy development, Analysis & interpretation of NRS/IRS data are not in respect of advertisement, hence, not covered under Advertising Consultancy.

  • STO 2013 CESTAT 301
  • Advertising Agency: Sale of Space: The assessee is admittedly a commercial concern engaged in providing advertisement services to a client, in relation to advertisement i.e in relation to sale of space or time and was not charged for sale of space for advertisement in the print media. They receive requisitions for arranging advertisements either directly by an advertiser or from another advertising agency and is also engaged on occasions in passing on material received from an advertiser directly without any value addition, to the advertising medium or in some instances by making value additions by way of advertising inputs; and in case of transactions involving another advertising agency based on the advertising material so received from the principal agency to the advertising media.

  • STO 2013 CESTAT 801
  • Air Cargo Agent: Stay: Whether the applicant is liable to pay service tax on receipt of lATA commission from various airlines: Directions issued for partial pre deposit.

  • STO 2012 CESTAT 582
  • Advertising Agency Service: Taxability on Write backs and volume discounts: Write ups is difference between value received and value paid to advertising agency: Pre deposit ordered: Volume discount: As per earlier decision in another case, unconditional waiver from pre deposit granted.

  • STO 2012 CESTAT 372
  • Advertising Agency Service: Commission earned from print media not taxable.

  • STO 2012 CESTAT 55
  • Advertising Agency Service: From 1.5.2006 providing space or time as the case me for display, advertising also comes under the scope of advertising agency service.

  • STO 2012 CESTAT 51
  • Advertising service: Incentive: When incentive was not known at the time of providing service tax, the same cannot be taxed.

  • STO 2011 CESTAT 282
  • Departmental Appeal: Dismissed as unsubstantiated and not perused diligently.

  • STO 2011 CESTAT 206
  • 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)

  • STO 2011 CESTAT 213
  • 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)

  • STO 2011 CESTAT 210
  • 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)

  • STO 2010 CESTAT 349
  • 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)

  • STO 2010 CESTAT 308
  • 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)

  • STO 2010 CESTAT 172
  • 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)

  • STO 2009 CESTAT 1522
  • Service Tax: Target incentives are not connected to services rendered to clients: Liability: In the light of the Tribunal's order in Euro RSCG Advertising Ltd, Vs Commissioner of C.S.T. Bangalore STO 2006 CESTAT 387 which has been followed in the case of Bajaj Alliance Life Insurance Co. Ltd. [2007 (8) S.T.R 301 (Tri.-Mumbai)] holding that target incentives are not connected to services tendered to clients and, therefore, are not liable to service tax and prima facie, service tax in the present case has been levied on incentives.(Para 1).

    Application allowed.

  • STO 2009 CESTAT 1383
  • Service Tax: Advertising Agency Services during the period 1999-01: Scope and liability: They are not preparing or visualizing or conceptualizing the publicity materials but only purchasing publicity materials and selling them and also paying sales tax on such materials. The activity carried out by the assessees is one of sale of materials and carrying out of scanning which can in no way be construed as rendering of “advertising agency service"(Para 2).

    Revenue appeal dismissed.

  • STO 2009 CESTAT 1488
  • Service Tax: Advertising Agency during the period 2002-2003, 2003-004 and 2004-2005: The services rendered by the appellant will fall under the category of "Advertising Agency". The only question that arises is what the exact amount of Service Tax liability is? The appellant contention is that they have not received the entire amount from their clients for which they need consideration. Both the lower authorities have not considered these submissions of the appellant with reference to the evidences available with the appellant. Since it is question of fact, the entire order may require reconsideration by the Adjudicating Authority(Para 5).

    Appeal allowed by way of remand.

  • STO 2009 CESTAT 571
  • 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.

  • STO 2009 CESTAT 354
  • 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’.

  • STO 2009 CESTAT 216
  • Service Tax: Recovery under Section 11D is not levy of duty under Section 3 of the Central Excise Act: Penalty: In the present case, it has been clearly held by the Original Authority that the appellant is not liable for payment of service tax during the relevant period. Once, the appellant is not liable to pay service tax, no penalty can be levied. Moreover, the amount collected from the clients has already been paid to the Government. The provisions of Section 11D have never been invoked in the Show Cause Notice. In the case of Indian Oil Corporation Ltd. Vs. CCE, Mumbai-II [CEO 2005 CESTAT 63] the Tribunal has held that the recovery under Section 11D is not levy of duty under Section 3 of the Central Excise Act. Consequently, no penalty and interest are liable to be paid by the assessee when the recovery is made under Section 11D. On the same issue there is another case-law in IOC Vs. CCE, Meerut [CEO 2002 CESTAT 65]. In this case also, it has been held that when there is excess collection, then in terms of Section 11D, assessee could be directed to pay excess of collected duty and penalties and interest cannot be imposed. This Bench in the case of Triveni Engineering & Indus. Ltd. Vs. CCE, Bangalore - III STO 2006 CESTAT 804 has held that when the show cause notice is not invoked Section 11D, the amount cannot be recovered. If the case of Visteon Automotive Systems India (P) Ltd. Vs. CCE, Chennai [STO 2006 CESTAT 1040] it has been held that once the appellant is not found liable to pay service tax, no need for imposition of any penalty. Going by the ratio of the said decisions, the demand of interest and imposition of penalty is set aside. (Para 4,5).

    Appeal allowed.

  • STO 2009 CESTAT 462
  • Service Tax: ‘Advertising Agency Service’ for the period April 2006 to February 2007: Scope and liability: The appellants were acting as agents of the print media. They paid service tax on the commission collected from the print media. A recent letter dated 5.5.2008 issued in F.No. 332/4/2007-TRU of the Ministry of Finance, Department of Revenue (Tax Research Unit) has reiterated the legal position that sale of space for advertisement in print media does not attract service tax. It has also been made clear that the Commission earned by an advertising agency is exigible to service tax. This tax was paid by the appellants. In the result, there will be waiver of pre-deposit(Para 1).

    Stay granted.

  • STO 2009 CESTAT 472
  • Service Tax: Advertising Agency for the period April to December 2006: Liability on price money for sale of space for advertisement: The appellants had paid service tax on the commission which they received from the print media for acting as the latter’s agent in the business of sale of space for advertisement to the former's clients. But they had not paid service tax on the price money for such sale, collected from the said clients. Circular F. No. 332/4/2008-TRU dated 5.5.2008, wherein it has been clarified that an advertising agency acting as intermediary between print media and advertisers need pay service tax only on the commission collected by them from the print media. The appellants have made out a strong case against the impugned demand of service tax, penalty etc. on the strength of the above circular.(Para 1).

    Stay granted.

  • STO 2008 CESTAT 20
  • 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.

  • STO 2008 CESTAT 58
  • Service Tax: Advertising Agency service: Waiver of pre-deposit: The demand is on the gross amount collected by the appellants from various clients for the service of providing space and time for display of advertisements. The subject advertisements were displayed in motion pictures, cinema tickets, hoardings and other parts of the theatre premises. The appellants have been paying service tax in relation to ‘sale of space or time for advertisement’ after 1-5-2006, the date on which this activity was recognised as taxable service and introduced as such in the Finance Act, 1994. Admittedly, the impugned demand is for the same service rendered to their clients for a period prior to 1-5-2006. The Revenue has reckoned such activity as an “Advertising Agency’s Service” covered by Section 65(3) ibid. It is the case of the appellants that, as the definition of ‘Advertising Agency’ did not undergo any change with the introduction of the taxable service of ‘sale of space or time for advertisement’ (1-5-2006), the appellants cannot be held to have rendered the taxable service of ‘Advertising Agency’ during the period of dispute. In other words, according to the appellants, the category of taxable service ‘sale of space or time for advertisement’ is not to be held to be a part of “Advertising Agency’s Service”. In this connection, learned Counsel has relied on a decision of this Bench viz. Commissioner of Central Excise, Chennai v. Sundaram Finance Ltd. [STO 2007 CESTAT 175](Para 1).

    Pre-deposit waived, stay allowed.

  • STO 2008 CESTAT 126
  • 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.

  • STO 2008 CESTAT 93
  • 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.

  • STO 2008 CESTAT 138
  • 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.

  • STO 2008 CESTAT 62
  • 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.

  • STO 2008 CESTAT 218
  • 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.

  • STO 2008 CESTAT 140
  • 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.

  • STO 2008 CESTAT 204
  • Service Tax: Advertising Agency service: Leasing of hoardings: Scope and liability: The appellant is covered by the statutory definition of ‘advertising agency’, being a commercial concern engaged in providing service connected with the making, preparation, display, or exhibition of advertisement. As per the clarification, when a hoarding company like the appellant billed an intermediary i.e., an advertising agency which in turn billed its clients, then the advertising agency which in turn billed its clients, thus the advertising agency intermediary is a service provider who is liable to pay tax. As the liability of the hoarding company is passed on to the ultimate advertising agency, the department had clarified that the hoarding company should ensure the person, to whom the board (hoarding) is let out, is registered with service tax as an assessee. The letter of the Commissioner had also clarified that with effect from 14-5-2003, as per Notification No. 5/2003, dated 14-5-2003, the ultimate advertising agency/intermediary could also avail credit of service tax if paid by it towards hiring of hoarding. Appellants are liable to pay service tax on the charges collected for leasing out hoarding to advertising agencies who exhibited publicity material and collected charges from their clients. However, if service tax is paid by such advertising agencies on the gross value including cost towards hoarding for exhibiting advertisements from their clients, there was no need for agencies like the appellants also to pay service tax for leasing out the hoardings. However, that the clients of the appellants are advertising agents registered with the department as assessees and had paid the service tax due was not established before the lower authorities by the appellants. In the circumstances, the matter is remanded to the original authority for taking a fresh decision in the matter. (Para 7,8).

    Appeal allowed by way of remand.

  • STO 2007 CESTAT 1207
  • 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.

  • STO 2007 CESTAT 1096
  • 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.

  • STO 2007 CESTAT 1354
  • 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.

  • STO 2007 CESTAT 214
  • Service Tax: Advertising Agencies: Scope: The activities carried out by the appellants would not come within the purview of the 'Advertisement Agency Services'. Therefore they would not come under the service tax net in terms of the Finance Act, 1994. The case laws cited by the learned Advocate also support his contention viz. : (i) Commissioner of Central Excise, Kolkata v. The Incoda STO 2004 CESTAT 126 (ii) Commissioner of Central Excise, Chennai v. Team UPD Ltd. - STO 2004 CESTAT 125 (Tri. - Chennai) (iii) Rex Advertisers v. Commissioner of Service Tax, Bangalore - STO 2006 CESTAT 89. It is also seen that an amount of Rs. 1,00,000/- towards the service tax has already been deposited.(Para 5).

    Pre-deposit waived, stay allowed.

  • STO 2007 CESTAT 304
  • Service Tax: Business Auxiliary Service: Cenvat credit on input service: Manufacture and sale of CT/TMT bars cannot be treated as a service. The view taken by the lower authorities is contrary to the distinction between manufacture and service. The appellant's franchise business of the brand name has nothing to do with the its manufacturing activity for the purposes of Cenvat credit; but advertisement activity is clearly in relation to manufacture and therefore, advertisement was an input.(Para 8,9).

    Appeal allowed.

  • STO 2007 CESTAT 1168
  • Service Tax: Advertising agencies: Discount/ Commission received from media whether can form part of taxable value: The present case is identical to the one decided by the Division Bench in the case of M/s. Euro RSCG Advertising Ltd. and M/s. Marketing Consultants & Agencies Ltd. v. CST by Final Order Nos. 60 & 61/2007 [STO 2006 CESTAT 387]. The appellant is an advertising agency. The taxable service in respect of advertising agency is defined in Section 65(105)(e) in the following manner:-"to a client, by an advertising agency in relation to advertisement in any manner." In the present case, a person or an organization who wants to advertise their product approaches an advertising agency. Therefore such a person/organization who wants to avail the services of advertising agency becomes the client of the advertising agency. The advertisement can be done in various ways either through Print Media or through Radio or Television, etc. in order to fulfill the requirements of his client the advertising agency which is the service provider gets in touch with the appropriate media. In other words as far as the advertising agency is concerned, its client is not the media. In order to provide advertising services the advertising agency charges certain amounts from the clients. Such amounts are liable to service tax. With regard to the relationship between the advertising agency and the media, the advertising agency has to pay amount to the media.The media such as broadcasting agency charges the advertising agency for insertion of the advertisement either in Print Media or in Television. In the present case, the media gives a discount of 15% to the advertising agency. If the Tariff rate is Rs. 100/-, it is sufficient the advertising agency pay the media Rs. 85/- along with service tax. The service tax component received from the advertising agency in turn is remitted to the exchequer by the media agency. The appellants have demonstrated that they have not received any amount from the media. They got only a discount from them. Perhaps the word "commission" is misleading. There is actually no evidence that the said amount has been received by the appellant from the media. In any case, any amount received by the service provider from his client only is liable to service tax and not amounts received from others.(Para 6).

    Cash / target discount: The service tax has been demanded on the amounts received as (i) cash discount (ii) target incentives. The Show Cause Notice itself makes it clear that these amounts have been received from the media. Since these amounts have not been received from the clients of the service provider (the appellants) there is no liability of service tax on these amounts.(Para 6).

    Appeals allowed.

  • STO 2007 CESTAT 708
  • Service Tax: Advertising agencies: Scope and liability: The show-cause notice has just assumed that the appellant received an amount from the media. There is absolutely no evidence that the appellants had received the abovementioned sum from anybody. The taxable service in respect of advertising agency is defined in section 65(105)(e) in the following manner:- "to a client, by an advertising agency in relation to advertisement in any manner." In the present case, a person or an organization who wants to advertise their product approaches an advertising agency. Therefore such a person/organization who wants to avail the services of advertising agency becomes the client of the advertising agency. The advertisement can be done in various ways either through Print Media or through Radio or Television, etc. in order to fulfil the requirements of his client the advertising agency which is the service provider gets in touch with the appropriate media. In other words as far as the advertising agency is concerned, its client is not the media. In order to provide advertising services the advertising agency charges certain amounts from the clients. Such amounts are liable to service tax. With regard to the relationship between the advertising agency and the media, the advertising agency has to pay amount to the media. In any case, any amount received by the service provider from his client only is liable to service tax and not amounts received from others. The adjudicating authority has neither considered the factual position nor the legality of the entire issue. The impugned order has no merits. (Para 9).

    Cash discount (ii) Target incentives, whether includible in taxable value: These discounts are received from publications. Since these amounts have not been received from the clients of the service provider (the appellants) there is no liability of service tax on these amounts.(Para 10).

    Appeals allowed.

  • STO 2007 CESTAT 192
  • Service Tax: Advertising agency: Scope and liability: The activity undertaken by the appellant namely, painting advertisement material on the roadside walls, shutters etc. has not been contested by the Revenue. In view of this and Tribunal's order in Star Neon Sign v. CCE, Chandigarh reported in STO 2002 CESTAT 35 wherein it was held that, The 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. The person like the appellants cannot be called as Advertising Agency as they are only writing or preparing the sign boards at the behest of their customers. There is no evidence on record to show the relationship between the customers and the appellant is of advertising agent which is necessary for imposition of service tax. Hence there is no need for insisting on pre-deposit of duty and penalty imposed(Para 2).

    Appeal disposed off.

  • STO 2007 CESTAT 74
  • Service Tax: Liability on amount received towards sale of television rights, sponsorship money, and logo money holding the same as advertising agency: Demand: Scope and liability: One of the main criteria of definition of Advertising Agency is that the same should be a commercial concern. The expression 'Commercial Concern' does not stand defined under the Act. As such, for understanding the scope of the above expression, help has to be taken from other sources. The Hon'ble Supreme Court in case of Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal reported in (1995) 2 SCC 161, Para 75, has held that BCCI is not a commercial organization.(Para 6,7). It can not be held that BCCI is an advertising agency. In the case of M/s. ZEE Telefilms Ltd. & M/s. Star India (P) Ltd. v. CCE, Mumbai reported in STO 2006 CESTAT 858, Tribunal has observed that the definition of advertising agency cannot be read literally and out of context, if that is done, every person in some way or the other connected with advertisement will be an advertising agency. Any interpretation leading to absurdity has to be avoided. BCCI cannot be held to be a commercial concern, the same would not be covered by definition of advertising agency. If that be so, any service provided by them would not be termed as a taxable service covered under the net of advertisement and on the short grounds itself, the appellant's liability to pay service tax on the activities undertaken by them cannot be upheld.(Para 9,10). There is no advertisement when the performance rights of the match vested in BCCI is being sold for viewership of million of peoples and there is no client to which such service in relation to advertisement is being provided. We have examined the condition of contract entered into by the appellant with the broadcaster, which require them exhibit of the matches above 50 million homes; the telecast of opening and closing ceremonies of cricket match etc. which may be fetters by BCCI to ensure compliance by the broadcaster. At the most, the rights in the cricket match owned by BCCI can be said to have been sold by them to the broadcasting agency and BCCI and television channel, at best, be termed as seller and buyer of rights. As such, sale of television/telecasting rights would not be covered by a taxable service in relation to advertisement. (Para 11). As regards sponsorship and logo money, the appellant is not connected, in any way, with conceptualizing, designing or preparing of advertising material of any of the sponsors and they are simply providing space either on the ground, boundaries of the ground, near club board, on trolleys used for serving soft drinks, the front side of the tickets and passes used for matches. As such, providing of space, without any connection with the work relating to the designing or preparation of advertisement would not bring them under the service tax net. In support reliance has been placed on the Trade Notice No. 1/96-S.T., dated 31-10-03, No. 54/301/03-S.T., dated 28-10-03, and Ministry's Letter No. 345/4/97-TRU, dated 16-8-99, clarifying that canvassing with client to sponsor the event and persuade them to give advertisement in particular newspaper/periodical/magazine would not amount to rendering of services in connection with advertisement.(Para 12). The expression "display" or "exhibit" does not mean the physical act of display and exhibit, but relates to the services rendered, as an expert body, to the client, for the purposes of display or exhibit. The same may involve the expertise of the provider of the services to advise the client as to in which manner, the advertisement should be displayed i.e. whether in the newspaper or on TV channel or by way of hoardings or a audio/video advertisement in air or any other medium or at what point of time the same should be exhibited. No such expert services are being provided by the appellant in the present case. They are merely canvassing their clients to make utilize of the space available with them for the purposes of advertisement of their product during the course of matches, which are going to be telecasted and by which they can popularize their products. As such, the activities amount to sale of space and not as regards advertisement.(Para 14).

    Appeal allowed.

  • STO 2007 CESTAT 384
  • Service Tax: Penalty u/s 76: Commissioner (Appeals) has not given any reason as to why the provisions of Section 80 could not have been invoked in this case. Service tax on Advertising Agency Services was brought into statute in November 1996. The period involved in this case is November 1996 to June 1997 wherein the provisions might not have been clear of the current appellant. Further, it is seen that the penalty imposed for the month of November 1996 and December 1993 is more than the amount of service tax the appellant "failed to pay". The provisions of Section 76 clearly imply that the penalty cannot exceed the amount of service tax the appellant failed to pay by applying the provisions of Section 76 of the Finance Act, 1994 the penalty imposed in excess to the tax liability would be incorrect. There seems to be an anomaly in imposing penalty on the appellant under the provisions of Section 76, and there being no reasoning given for non invocation of provisions of Section 80, hence matter remanded(Para 3).

    Appeal disposed of.

  • STO 2007 CESTAT 571
  • Service Tax: advertisement agency: Scope and liability: Applicant, are spending on advertisement of the products of Kandhari Beverages, hence they are covered under the scope of advertisement agency which means any commercial concern providing any service connected with making, preparation or display of advertisement. As the appellants are receiving the amount in respect of commission also from Kandhari Beverages and part of that amount was spent on advertisement, therefore, it is not a fit case for total waiver.

    Pre-deposit ordered.

  • STO 2007 CESTAT 381
  • Service Tax: Advertising agency: Purchase and sale of time slots to the advertising agency: Scope: Circular No. 334/4/2000-TRU, dated 22-2-2006 vide which CBEC has explained the scope of new services which were introduced from 1-5-2006. The activity of the applicant i.e. "sale of space or time for advertisement" was specifically introduced as a new taxable service w.e.f. 1-5-2006. If the Board has understood the said service as new service from 1-5-2006, prima facie activity of the applicant for the period prior to 1-5-2006 would not get covered under the category of an advertising agency.(Para 2).

    Pre-deposit waived, stay allowed.

  • STO 2007 CESTAT 401
  • Service Tax Advertisement service: Scope: Appellant is providing manpower for the painting of advertisement materials on walls. This is brought out by the contract as well as bills also. Wall painting under a labour contract cannot be equated with advertising. Prima facie, appellant's contention merits acceptance.(Para 1,2).

    Pre-deposit waived, stay allowed.

  • STO 2007 CESTAT 359
  • Service Tax: Business auxillary service: Penalty: Period of limitation: The period of demand is from July 2003 to March 2005. Thus unless extended period under proviso to Section 73(1) of the Finance Act, 1994 is justified, the entire demand would be time barred. The appellants have shown enormous correspondence between them and the Revenue with regard to the leviability of service tax. Even from 27-12-2001 the Department had taken up the investigation. It has also been stated that the officers visited premises of the appellants several times. All along the Revenue was directing the appellants to register under the category of advertisement services. However, the appellants were challenging leviability of the services rendered by them in the category of advertisement services. Invocation of longer period is not at all justified as there is no evidence of suppression of facts. (Para 6).

    Appeal allowed.

  • STO 2006 CESTAT 387
  • Advertising Agency : Any amount received by the service provider from his client only is liable to service tax and not amounts received from others.

  • STO 2006 CESTAT 382
  • 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.
     

  • STO 2006 CESTAT 588
  • 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.:
     

  • STO 2006 CESTAT 875
  • 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.

  • STO 2006 CESTAT 713
  • 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

  • STO 2006 CESTAT 420
  • 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.
     

  • STO 2006 CESTAT 575
  • 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.
     

  • STO 2006 CESTAT 570
  • 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.

  • STO 2006 CESTAT 383
  • 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.
     

  • STO 2006 CESTAT 859
  • 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.

  • STO 2006 CESTAT 85
  • 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.

  • STO 2006 CESTAT 71
  • 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.

  • STO 2006 CESTAT 858
  • 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.

  • STO 2006 CESTAT 89
  • 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.

  • STO 2006 CESTAT 5
  • 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.

  • STO 2005 CESTAT 31
  • 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.

  • STO 2005 CESTAT 203
  • 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.

  • STO 2005 CESTAT 167
  • 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.

  • STO 2005 CESTAT 190
  • 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.

  • STO 2005 CESTAT 234
  • 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.

  • STO 2005 CESTAT 156
  • 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.

  • STO 2005 CESTAT 138
  • 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.
     

  • STO 2005 CESTAT 28
  • 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.
     

  • STO 2005 CESTAT 291
  • 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.

  • STO 2004 CESTAT 135
  • Service Tax: Activity of Production of T.V. Serials: Scope and Liability: Certificate of Registration under Section 69 of the Finance Act, 1994 issued by the Central Excise shows that the appellant is a 'Serial Recording & Advertising Co.'. However it is stated that their activity is only for producing T.V. serials and they are not carrying out activities of advertising agency. The balance sheet discloses that the appellants are carrying out the activities of production of T.V. serials. Therefore the Service Tax charged based on the assumption that the appellants are carrying out the activities of advertising agency is not correct. This position may be examined and verified in the light of enormous evidence produced by the appellants.(Para 3).

    Matter remanded.

  • STO 2004 CESTAT 125
  • 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.

  • STO 2004 CESTAT 123
  • 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).

  • STO 2004 CESTAT 126
  • 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.

  • STO 2004 CESTAT 139
  • Service Tax: Waiver of Pre-Deposit of Duty and Penalty: The Appellants are acting as an agency of M/s. Asian Today Ltd. and Star Advertising Sales for collecting the advertising material from the prospective clients for being displayed on the channels under their control. The Revenue has not prima facie been able to show that the appellants are engaged in providing any service connected with the making, preparation, display, exhibition of advertisement in view of the decision of the Madras High Court in the case of Advertising Club v. Central Board of Excise & Customs - STO 2001 Mad 180 and Board's Circular No. 78/8/2004-S.T., dated 23-3-2004 wherein the Board has clarified that in case of free commercial time, selling the time allotted to a predecessor does not fall within the purview of advertisement service as it is merely selling of place and nothing to do with the actual presentation of the advertisement; that therefore, the Appellants who were only acting as an agent of ATL/Star TV cannot be treated as covered by definition of taxable service under the Finance Act, 1994 relating to advertisement. The appellants have thus succeeded in making out a strong prima facie case in their favour(Para 5).

    Pre-deposit waived, stay granted.

  • STO 2004 CESTAT 46
  • 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.

  • STO 2004 CESTAT 10
  • 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.

  • STO 2003 CESTAT 33
  • 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.

  • STO 2002 CESTAT 35
  • 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.

  • STO 2002 Ker 42
  • 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)

  • STO 2001 CESTAT 188
  • 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.

     

  • STO 2001 Mad 180
  • 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"

  • STO 2001 Mad 181
  • 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.

  • STO 2001 CESTAT 203
  • 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.

     

  • STO 1997 Mad 2
  • 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.

  • STO 1997 Guj 1
  • 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.

     
     

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