Advertising agency classification dispute: commission-based canvassing fell outside the demanded category, so the tax demand was set aside.

Canvassing advertisements on a commission basis was held not to fall within Advertising Agency Service, as the Board's circular treated such activity as taxable, if at all, under Business Auxiliary Service. The demand failed because the show cause notice and confirmation were issued under Section 65(105)(e) of the Finance Act, 1994, and not under Business Auxiliary Service; the differential service tax on the disputed commission was therefore unsustainable and set aside. Interest on belated payment was not contested and was maintained.

---

---

Issues: Whether the appellant's activity of canvassing advertisements on commission basis was classifiable under Advertising Agency Service or Business Auxiliary Service, and whether the demand of differential service tax raised under Advertising Agency Service was sustainable.

Analysis: The Board's circular clarified that merely canvassing advertisements for publication on commission basis does not fall under Advertising Agency Service and is liable to service tax under Business Auxiliary Service. The show cause notice and the demand proceeded on the footing of Section 65(105)(e) of the Finance Act, 1994, which covers Advertising Agency Service. Since the demand was not raised under Business Auxiliary Service, the confirmed differential demand on the disputed commission was unsustainable. The demand of interest on belated payment was not disputed by the appellant and was not interfered with.

Conclusion: The demand of differential service tax on the commission received for canvassing advertisements was set aside, while the interest demand was upheld.

---