Service tax on print media space sales was not sustainable; only the agency commission remained taxable.

Sale of space in print media was treated as outside the service tax net, while only the commission retained by the advertising agency remained taxable as advertising service. The demand based on alleged suppression of the larger space-selling value was therefore unsustainable, because the tax had already been discharged on the commission component. Advance receipts did not justify separate inclusion in the taxable value on the facts considered, and the demand was not sustained. The Revenue's appeal was dismissed and the order dropping the demand was upheld.

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Issues: Whether service tax demand on the value attributable to sale of space in print media and on the related commission was sustainable, and whether the amounts received as advance required separate inclusion in the taxable value.

Analysis: The circular on space-selling in print media clarified that sale of space in print media is not exigible to service tax, while the commission earned by the advertising agency remains taxable. The respondent had discharged tax on the commission retained by it, and the balance amount representing the cost of print media space was outside the tax net. The challenge that the respondent was suppressing 85% of the value was therefore untenable. On advances, the order under appeal was found to suffer from no infirmity, and the demand was not sustained.

Conclusion: The demand of service tax was not sustainable. The appeal by the Revenue was dismissed and the order dropping the demand was upheld.

Final Conclusion: The dispute was resolved against the Revenue, with the adjudication confirming that only the commission on print media transactions was taxable and not the value of the space sold in print media.

Ratio Decidendi: Sale of space in print media is not taxable as advertising service, but the commission retained by the advertising agency on such transactions is liable to service tax.

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