TaxTMI 
TaxTMI 
2018 (3) TMI 105
X X X X Extracts X X X X
X X X X Extracts X X X X
....up during the audit, was that during financial year 2009-10, they provided service of Rs. 35,31,947/- to their client CHI Limited based in Nigeria and contended that this amount should be excluded from the total sale value as they had exported taxable services to a place outside India. The department did not accept the assessee claim of Export of services. Accordingly, two show cause notices dated 23.10.2009 and 21.10.2009 were issued to the appellant. The same were adjudicated, resulting in confirmation of demand along with interest and imposition of penalties. Aggrieved from the same, the appellant have filed this appeal. 3. Ld. Advocate for the appellant submits that they buy space and time on behalf of its customers in print/electronic media to release ads. The appellant also make payments to such publishers/broadcasters on customer s behalf and is entitled to get the same reimbursed on submission of invoices or bills issued by such publishers. For these agency services, the appellant gets commission from its customers and the appellant also raises an invoice on its customers towards reimbursement of the advertisement cost in addition to its commission. Appellant charges tax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssue, we find that the appellant is providing taxable service of advertising service and the Revenue has alleged that the service tax is to be paid on the gross amount charged by the advertising agency from the client for the services. We find that the adjudicating authority while analysing the Board Circular No.341/43/63-TRU dated 31.10.1996 has completely misread the said circular. Para 4 of the circular which is reproduced below clearly lays down that the amount paid by the advertising agency for space and time in getting advertisement published and broadcast in print/electronic media will not be included:- 4. It is further to be clarified that in relation to advertising agency, the service tax is to be computed on the gross amount charged by the advertising agency from the client for services in relation to advertisements. This would, no doubt, include the gross amount charged by the agency from the client for making or preparing the advertisement material, irrespective of the fact that the advertising agency directly undertakes the making or preparation of advertisement or gets it done through another person. However, the amount paid, excluding their own commission, b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....osition and nothing more. Therefore, it cannot be said that such a circular/letter has the effect of enlarging the scope of Section 67(d) of the Act, as is argued. We are in agreement with the learned single Judge, who has by making a reference to Section 65(16) of the Act commented upon the Taxable Service and has pointed out that the taxable service by an advertising agency is the service provided to its clients in relation to the advertisements in any manner. We have already shown above that even selecting or locating a particular print media or electronic media for flashing a particular advertisement would amount to a taxable service by the advertising agency and any commission earned by it on that account even from such print media or electronic media, if it forms a part of the Gross Amount charged and spent by the client, would be covered in Section 67(d) of the Act." 10. This Tribunal in the case of Dabur India Ltd. (supra) has examined identical question and came to the following conclusion: "We find from the invoices placed on record that the Dabur India Ltd. Kaushambi is the recipient of two services, namely, the service from the advertising agencies like ADBU....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ission received by the advertising agency would, however, be includible in the value of taxable service." 7. We observe that there is no dispute in the present case that the broadcasting of advertisement has been done on behalf of the appellant and the bills have also been raised on the appellant and the appellant has borne the incidence of Service Tax on the broadcasting service. Further, while passing the order, dated 30-9-2013, the adjudicating authority has caused verification of the transactions undertaken by the appellant in respect of broadcasting services and advertising agency services. After verifying that the appellant had availed both the services and has also borne the incidence of Service Tax, he came to the conclusion that the appellant is rightly eligible for the benefit of the Cenvat credit of the Service Tax paid on broadcasting service. The same ratio shall apply for the previous period also. Therefore, we do not find any merit in the impugned order. Accordingly, we set aside the same and allow the appeal with consequential relief, if any, in accordance with law." 11. Following the above judgment and by relying on the CBEC circular dated 31.10.1996 me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce with the Apex Court s ruling in the above-mentioned judgments that Service Tax is a value added tax, which in turn is a destination based consumption tax in the sense that it is levied on commercial activities, and it is not a charge on the business but a charge on the consumers. There is nothing in Export of Service Rules, 2005 which can be said to be contrary to the principle that a service not consumed in India is not be taxed in India. (iii) What constitutes export of service is to be determined strictly with reference to the provisions of Export of Services Rules, 2005. Not doing so and leaving this question to be determined by individuals tax payers or tax collectors for each service, based on their deductive ability would result only in utter confusion and chaos. (iv) Money transfer service is being provided by the Western Union from abroad to their clients who approached their offices or the offices of their agents for remitting money from to friends/relatives in India. The service being provided by the agents and sub-agents is delivery of money to the intended beneficiaries of the customers of WU abroad and this service is business auxiliary service , ....