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of <h1>Appeals Allowed in Service Tax Case, Stay on Recovery, Remand for Further Consideration</h1> The Tribunal allowed the appeals filed by M/s. Zee Telefilms Ltd. and M/s. Star India Pvt. Ltd. against the Service Tax demand and penalty. The Tribunal ... Service Tax – Advertising agency (1) Stay/Dispensation of pre-deposit service tax (2) Demand and penalty (3) Recovery of whole amount of service tax and penalty stayed Issues:Appeal against Service Tax demand and penalty imposed on M/s. Zee Telefilms Ltd. and M/s. Star India Pvt. Ltd.Analysis:The appeals filed by M/s. Zee Telefilms Ltd. and M/s. Star India Pvt. Ltd. were regarding the waiver of pre-deposit of Service Tax demanded from them and the equivalent penalty imposed. The Appellants acted as exclusive agents for foreign television channels, collecting dues from customers in India. The issue revolved around whether the appellants should be treated as advertising agents under the Finance Act, 1994. The appellants argued that they did not provide services connected with making, preparation, display, or exhibition of advertisements, citing a Madras High Court decision and a Board's Circular. They contended that flashing advertisements on the channel did not constitute advertising agency service. They also relied on a Tribunal decision stating that Service Tax is attracted on advertising agencies providing conceptualizing, designing, or preparing advertisements. The appellants claimed they were not covered by the definition of taxable service related to advertisement.The Departmental Representative argued that the appellants' services involved selling advertisements for display on TV networks, acting as advertising consultants under the Finance Act, 1994. They highlighted various responsibilities undertaken by the appellants, such as obtaining approvals, maintaining client lists, and assisting advertisers in complying with legal formalities. The Department contended that these activities fell within the definition of an advertising agency, making the appellants liable to pay Service Tax.The Tribunal observed that the appellants acted as agents for collecting advertising material to be displayed on channels under their control. Referring to the Madras High Court decision and a Board's Circular, the Tribunal found that the appellants were not engaged in providing services connected with the making, preparation, or display of advertisements. As the Commissioner (Appeals) had not decided the matters on merits, the Tribunal stayed the recovery of the entire amount of Service Tax and penalties, remanding the cases for further consideration. The appeals were allowed by way of remand, and the cross-objections filed by the Revenue were also disposed of.
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