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of <h1>Tribunal sets aside service tax demand on advertising agency services, highlights importance of additional evidence</h1> <h3>M/s. Bhagwati Enterprises Versus Commissioner of Central Excise, Jalandhar</h3> M/s. Bhagwati Enterprises Versus Commissioner of Central Excise, Jalandhar - 2015 (40) S.T.R. 750 (Tri. - Del.) Issues:1. Service tax demand on advertising agency service.2. Interpretation of the definition of advertising agency.3. Admissibility of additional evidence in appeal.Issue 1: Service tax demand on advertising agency serviceThe case involves an appeal against an order confirming a service tax demand of Rs. 3,58,546 on the grounds that the appellants were providing advertising agency services without paying service tax during 2006-07. The appellants argued they were not providing advertising agency services but were renting space from Railways and subletting it, contending their activities fell under renting of immovable property service, which was not taxable during the period.Issue 2: Interpretation of the definition of advertising agencyThe Tribunal analyzed the definition of advertising agency under Section 65(3) of the Finance Act, 1994, which includes providing services related to advertisement making, preparation, display, or exhibition. Referring to precedents, the Tribunal noted that merely renting space without being involved in advertisement-related services does not constitute advertising agency service. Citing cases like CCE vs. Azad Publication and CCE vs. The Incoda, it was established that renting space for advertisements without providing advertisement-related services does not classify as advertising agency service.Issue 3: Admissibility of additional evidence in appealThe Commissioner (Appeals) had refused to admit additional evidence submitted by the appellants during the appeal stage, citing Rule 5 of the Central Excise (Appeals) Rules, 2001. However, the Tribunal, in the interest of justice, allowed the admission of additional evidence supporting the appellants' claim that they were only renting out space and not providing advertising agency services. The case was remanded to the Commissioner (Appeals) for readjudication based on the newly admitted evidence, with the direction to reassess whether the activities of the appellants indeed constituted advertising agency services.In conclusion, the Tribunal set aside the order-in-appeal and emphasized the importance of considering additional evidence to determine the nature of services provided by the appellants, highlighting the distinction between renting space and providing advertising agency services for the purpose of service tax liability.
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