Trade discount as commission under Business Auxiliary Service justified only partial stay and conditional deposit.

Trade discount received by an appellant was examined for prima facie service tax exposure as commission under Business Auxiliary Service. The Tribunal observed that the service tax provisions and the rules governing advertising agencies, on a prima facie reading, indicated disciplinary control by the Newspaper Society over the appellant in relation to advertising services, supporting an agency-characterisation of the discount. On that basis, the Tribunal found no ground for full interim relief and declined a complete stay of the impugned order, directing deposit of Rs. 5 lakhs within eight weeks while waiving the balance demand for the time being.

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Issues: Whether the trade discount received by the appellant was prima facie liable to service tax as commission under Business Auxiliary Service, and whether stay of the impugned order was warranted.

Analysis: The Tribunal noted that the dispute had to be decided on the service tax provisions and the relevant rules governing advertising agencies. On a prima facie reading, the rules disclosed disciplinary control by the Newspaper Society over the appellant in relation to advertising services, which supported the view that the trade discount received was in the nature of commission to an agent. In view of this prima facie conclusion, the Tribunal found no infirmity in the findings below for purposes of stay.

Conclusion: No full stay was granted. The appellant was directed to deposit Rs. 5 lakhs within eight weeks and the balance demand was waived for the time being.

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