Tribunal rules municipal ad revenue not taxable as service, based on public duty, not service to agents.

The Tribunal allowed the appeal, holding that amounts collected by Municipal Corporations for displaying advertisements are not considered consideration for providing advertising services. Relying on a judgment of the Gujarat High Court, the Tribunal concluded that granting permission for advertising is a public duty, not a service to advertising agents. Therefore, the imposition of service tax on the collected amounts was deemed unsustainable. The appellant was granted consequential relief in line with the law, and the matter was resolved with the Tribunal's decision.

---

---

Issues:
Whether service tax is leviable on the amount collected by Nagar Nigam, Kanpur for allowing display of advertisement under the category of 'Sale of space or time for Advertising services'.

Analysis:
The appeal arose from an Order-in-Original passed by the Commissioner, Central Excise, Kanpur, concerning the levy of service tax on amounts collected by Nagar Nigam, Kanpur for displaying advertisements. The original Authority treated the collected amount as consideration for the sale of space or time for advertising services, leading to the imposition of a demand and penalty. The appellant challenged this decision before the Tribunal.

During the hearing, both parties acknowledged that the issue had been settled by previous final orders of the Tribunal in similar cases involving Nagar Nigams. The Tribunal noted that the issue was no longer res-integra, citing a judgment of the Hon'ble Gujarat High Court in a related matter. The Gujarat High Court had ruled that the grant of permission by a Municipal Corporation for advertising purposes is part of its public duty and not a service rendered to advertising agents. Following this precedent, the Tribunal held that amounts collected by Municipal Corporations cannot be considered as consideration for providing advertising services.

Based on the settled legal position and the Gujarat High Court judgment, the Tribunal concluded that the impugned order was unsustainable. Consequently, the appeal was allowed, and the appellant was deemed entitled to consequential relief in accordance with the law. The Tribunal's decision was pronounced and dictated in court, bringing the matter to a close.

---