2004 (6) TMI 7 - AT - Service Tax

Metro Railway Coaches Advertisements Not Subject to Service Tax

The Tribunal upheld the decision of the Commissioner (Appeals) of Central Excise, Kolkata, and dismissed the Revenue's appeal. It was held that displaying ... Advertising Agency - liability to pay Service Tax for display of advertisements - hiring/displaying advertisement space on thirdparty property as distinct from advertising services - definition of advertising agency under the Finance ActAdvertising Agency - liability to pay Service Tax for display of advertisements - Whether providing/displaying advertisement space inside Metro Railway coaches by hiring space and charging rent amounts to being an Advertising Agency liable to Service Tax. - HELD THAT: - The Tribunal accepted the factual characterisation that the respondent hired space in Metro Railway coaches and permitted its clients to display advertisements there while raising rental charges. Applying the reasoning of the Delhi Tribunal in Commissioner of Central Excise, Ludhiana v. Azad Publications, the Tribunal held that such activity - merely providing/displaying space and realising rent - does not fall within the definition of an Advertising Agency and therefore does not attract Service Tax under the provision governing advertising agency services. The Tribunal found the facts of the present case to be similar to Azad Publications and, on that basis, found no merit in the Revenue's appeal. [Paras 5, 6]Appeal dismissed; service of displaying advertisements by hiring space in metro coaches held not to be an advertising agency service liable to Service Tax.Final Conclusion: The Revenue's appeal is dismissed; permitting display of advertisements on hired space in metro coaches and charging rental therefor is not an advertising agency service subject to Service Tax, following the precedent applied by the Tribunal. Issues:1. Appeal against Order-in-Appeal by Commissioner of Central Excise, Kolkata.2. Determination of liability to pay Service Tax for displaying advertisements in Metro Railway Coaches.Analysis:1. The appeal was filed by the Commissioner of Central Excise, Kolkata-V, challenging the Order-in-Appeal issued by the Commissioner (Appeal-I) of Central Excise, Kolkata, which had set aside the order of the Superintendent of Central Excise, Service Tax Cell, Kolkata-I. The case involved M/s. The Incoda, authorized by Metro Railway for advertisement services, who applied for Service Tax Registration as an 'Advertiser' but later requested for cancellation, which was rejected by the Superintendent. The Commissioner (Appeals) of Central Excise, Kolkata, allowed the appeal filed by M/s. The Incoda, leading to the current appeal by the Revenue.2. The main issue in this case was whether the act of displaying advertisements in Metro Railway Coaches constituted an activity of an Advertising Agency, thereby attracting liability to pay Service Tax. Citing a similar case before the Delhi Tribunal, where it was held that such activity did not fall under the definition of an advertising agency, the Tribunal in the present case found that the respondent had hired space in Metro Railway Coaches and provided it to clients for advertisement, akin to the case precedent. Consequently, the Tribunal dismissed the appeal filed by the Revenue, ruling that the activity did not merit the imposition of Service Tax.In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) of Central Excise, Kolkata, and dismissed the appeal filed by the Revenue, based on the finding that the act of displaying advertisements in Metro Railway Coaches did not classify the respondent as an Advertising Agency liable to pay Service Tax, in line with the precedent set by a similar case before the Delhi Tribunal.