Appeal allowed: Hoarding space procurement not taxable. Clarification on service tax scope.

The appeal was allowed as the Tribunal held that procuring hoarding space alone does not constitute a taxable service under the Advertising Agency category. The appellants, acting as a procurement agency for another entity, had paid the necessary service tax through the principal company, making the demand for additional service tax unjustified. The judgment clarified the scope of taxable services in this context, emphasizing that service tax may not apply if the tax has already been paid by the principal company.

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Issues:
1. Failure to take registration under Section 69 of the Finance Act, 1994.
2. Failure to pay service tax under Section 68 read with Section 66 of the Finance Act, 1994.
3. Failure to file prescribed returns under Section 70 of the Finance Act, 1994.
4. Applicability of Service Tax on procuring hoarding space.
5. Interpretation of taxable service under the category of Advertising Agency.

Analysis:
1. The appeal was filed against Order-in-Appeal No. 9/2005-CE regarding the failure to comply with registration, payment of service tax, and filing of returns as per the Finance Act, 1994. The Asst. Commissioner confirmed a demand of Rs. 1,15,023/- along with penalties. The appellants contended that they were a procurement agency working for another entity, M/s. Empire Publicity Service, and that the service tax had already been paid by M/s. Empire Publicity Service. The main issue was whether the appellants were liable to pay service tax separately.

2. The learned advocate argued that the appellants were only hiring advertisement space and had paid tax to Banglore Mahanagar Palike, which should not be considered a taxable service under the Advertising Agency category for service tax purposes. He relied on a Board's Circular and various case laws to support his argument. The Revenue, represented by the JDR, supported the lower authorities' orders.

3. Upon careful review of the case records, it was found that the appellants had paid an amount to BMP for advertisement tax while only procuring hoarding space. The Tribunal referred to the Board's circular and previous case laws to conclude that procuring hoarding space alone does not constitute a taxable service under the Advertising Agency category. The amount paid to BMP had already been included in the billings of M/s. Empire Publicity Service and had suffered service tax. Therefore, the demand for service tax on this amount was unjustified. The appeal was allowed, and the impugned order was deemed to lack merit.

This judgment clarifies the scope of taxable services under the Advertising Agency category and emphasizes that merely procuring hoarding space may not attract service tax if certain conditions are met, such as the tax already being paid by the principal company.

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