Appellant wins service tax case, exempt from liability for 2006-09 period.

The Tribunal ruled in favor of the appellant, finding that they were not liable to pay service tax under Advertising Agency Service for the period 2006-07 to 2008-09. The Tribunal determined that the appellant's activities fell under Sale of Space or Time for Advertisement Service rather than Advertising Agency Service as defined in the Finance Act, 1994. Consequently, the Tribunal granted a complete waiver of pre-deposit and stayed the recovery of the tax liability pending the appeal.

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Issues:
1. Whether the appellant is liable to pay service tax under Advertising Agency Service for the period 2006-07 to 2008-09.
2. Interpretation of the definition of Advertising Agency Service under Section 65 (03) of the Finance Act, 1994.
3. Clarification on the scope of Sale of Space or Time for Advertisement Service.
4. Consideration of CBEC instruction regarding the computation of service tax for advertising agencies.

Analysis:
1. The appellant filed a stay application and appeal against the Order-in-Original confirming a service tax demand of Rs. 56,12,124 under Advertising Agency Service. The appellant leased hoarding sites to advertisers/agencies for displaying advertisements and contended that it paid service tax on consideration received directly from advertisers but not for advertisements displayed through agencies. It argued that it was not providing advertising agency service and thus not liable for service tax.

2. The Tribunal examined the definition of Advertising Agency Service under Section 65 (03) of the Finance Act, 1994, which includes any person engaged in services related to advertisement making, preparation, display, or exhibition. The Tribunal found that the appellant was not engaged in these services and was not an advertising consultant. The service provided seemed to fall under Sale of Space or Time for Advertisement Service, as defined in Section 65 (105) (zzzm).

3. Referring to a CBEC instruction, the Tribunal clarified that service tax for advertising agencies should be computed on the gross amount charged for advertisement services, including making or preparing advertisement material. However, amounts paid for space and time in print or electronic media would not be included in the taxable service value. The commission received by the agency would be included in the taxable service value.

4. Based on the analysis, the Tribunal found that the appellant was not covered under the scope of advertising agency service. Consequently, the Tribunal granted a complete waiver of pre-deposit and stayed the recovery of the tax liability during the appeal's pendency.

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