Single composite advertising service cannot be split for separate Business Auxiliary Service tax on markup charges.

A composite billing arrangement for advertising services could not be split for separate taxation when the assessee had already discharged service tax on the advertising agency service actually rendered. The 10% markup collected from Government departments formed part of the same transaction, so taxing the same consideration again as Business Auxiliary Service was legally unsustainable. The entire value had to be classified under one service category only, and the separate demand on the markup failed.

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Issues: Whether the 10% charges collected by the assessee in the same bill, over and above the actual advertising expenditure paid to the executing agency, could be separately taxed under Business Auxiliary Service when the underlying transaction was already accepted and taxed as advertising agency service.

Analysis: The assessee had been registered and was discharging service tax as an advertising agency on the value of the services actually rendered through another agency. The disputed amount represented an additional 10% markup collected from Government departments in the same composite billing arrangement. The Revenue's attempt to tax the same transaction partly as advertising agency service and partly as canvassing under Business Auxiliary Service was held to be legally unsustainable, because the entire consideration arose from a single service transaction and had to be classified under one service category only.

Conclusion: The 10% charges could not be subjected to service tax separately under Business Auxiliary Service. The demand was unsustainable and the assessee succeeded.

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