TaxTMI 
TaxTMI 
TaxTMI 
2013 (3) TMI 382
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....r Publications Ltd. are publishers of a newspaper by name "Maalai Malar". During the course of audit of their accounts, it was noticed that the appellant have canvassed for advertisements for Maalai Malar (published by Malar), Daily Thanthi and Rani Weekly up to 31-3-2005 and that Malar have taken over the business of the appellant as a going concern w.e.f. 1-4-2005. It appeared that the activity of canvassing for advertisements in the publications might be classified as 'promotion or marketing of advertisement services' of the publications and such services would fall under the category "Business Auxiliary services" w.e.f 1-7-2003. This position had been clarified in Circular No. 96/7/2007-S.T., dated 23-8-2007 stating that canvassing adve....
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.... Act, 1994 was issued to the appellant. After due process of law, the Lower Adjudicating Authority had confirmed the proceedings initiated in the Show Cause Notice after dropping the penalty imposed under Section 76 of the Finance Act, 1994 vide impugned Order-in-Original. But the Lower Adjudicating Authority gave an option to the appellant that the penalty under Section 78 would be reduced to Rs. 5,68,575/- if the service tax along with interest and above determined penalty are paid within 30 days from the date of communication of the order. But the appellant failed to utilize this opportunity. 2. Aggrieved, the appellant had filed this appeal mainly on the following grounds : (i) that the appellant's activity of canvassing for advertise....
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....ared on behalf of the appellant and reiterated their submission. Despite intimation, no one appeared on behalf of the respondent-Department. 4. During the hearing, in addition to reiterating the submissions made already in the appeal memorandum, the advocate has further emphasized that in terms of Board's Circular No. 64/13/2003-S.T., dated 28-10-2003, selling of space is not liable for Service tax and he relied on the Hon'ble Tribunal Bangalore decision in the case of Rex Advertisers v. Commr. of S.Tax, Bangalore - 2006 (2) S.T.R. 330 (Tri.-Bang.) 4.1 He has further submitted that even when space selling was brought under Service tax net in 2008, sale of space for advertising in Print Media was excluded from levy of Service tax and in th....
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....on of Board's Circular No. 96/7/2007-S.T., dated 23-8-2007 wherein it is stated as canvassing advertisements for publishing on commission basis were liable to Service tax under "Business Auxiliary Service". The appellant had produced copies of agreement entered into between them and Malar Publications towards canvassing of advertisement spaces with Daily Thanthi, Maalai Malar and Rani Syndicate. I find from the agreement that the appellant are paid with fixed retainer fee on monthly basis and they do not render the services to the above publications on commission basis which proves that their service will not fall under "Business Auxiliary Service". The retainer fee is paid on fixed rate for some years as per the agreement. As the appellant....
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....pproaching a customer, receiving the texts of the advertisement (including photographs, monograms etc. of the customs), estimating the space that such advertisement would occupy in the newspaper/periodical/magazine, negotiating the price, informing the general layout of the advertisement, that would finally appear in such newspaper etc. In such cases the term 'canvassing' would certainly fall within the phrase 'any service provided in any manner connected to making preparing, displaying and exhibiting' and would be 'taxable service.' 4. In view of above, I have been directed to say that if the canvassing is limited to space selling then such services would not be liable to any service tax. However, if canvassing is involving receiving the ....