TaxTMI 
TaxTMI 
2021 (2) TMI 7
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....vestigation and collecting various documents viz. Form 26AS, ST-3 Returns and payment of Service Tax, Audited Balance Sheet, Bills issued for relevant period alongwith Work Order, the investigation was of the view that the appellant is not merely selling/renting of bare spaces to their clients but providing additional services to its customers for displaying their advertisements on the hoardings and kiosks and therefore, liable to service tax. Investigation also recorded statements from the partner of the appellant Shri Yashwant Shah and contended that as per the statement and the statements taken from four customers, it reveals that the appellant is engaged in providing the Advertising Services to their clients which is liable for Service Tax and does not fall under the Negative list. After detail investigation a Show Cause Notice dated 13.06.2017 was issued invoking extended period. After considering the detailed reply submitted by the appellant and providing Personal Hearing, the adjudicating authority passed the impugned order confirming the charges and allegation levelled in the Show Cause Notice and demand of Service Tax, Interest and Penalty as proposed in the Show Cause Not....
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....e consideration is charged from the client for maintenance of the advertisements or electrification as the same are already included in the consideration charged for displaying of the advertisements. He further submits that at the end oF the agreed term, either the contract is renewed or it gets expired. In case of renewal of contract no further activity is carried out by the appellant except considering the element of discount or price reduction, if any, demanded by the customers. However, in case of expiry of contract the advertisement material i.e. Flex banners of the clients are removed and printing material containing contact details of the appellant are again mounted on the hoarding/bill board/kiosk, etc. at the cost of the appellant so as to make the media space available for new client. 2.2 As regard legal provision he submits that the service of sale of space for advertisement other than advertisement by radio or televisions are taxable prior to 1st July, 2012. With the introduction of negative list of services with effect from 1st July, 2012, the above referred services were covered under the negative list as per the clause (g) of Section 66D of the Finance A....
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....y, Ministry of Finance, Department of Revenue, Government of India issued a clarification on this service vide D.O.F. 334/4/2006-TRU dated 28.02.2006 which shows that advertisement on building covers under the scope of sale of advertising spaces. 2.5 He submits that partner of the appellant Shri Yashwant Shah explained about the procedure/practice of the appellant for obtaining work order related to preparation and displaying of advertising materials and hoardings. He specifically mentioned that the appellant arranged/managed to display advertisements of their clients on the hoardings for the specific period and charge for the service rendered by them. Advertising agencies provides printed vinyl or flex which was mounted on hoardings by themselves or through the sub-contractors namely Aagam Publicity. He further states that in a case where advertising agency wanted the services or printing of the material of their clients, they have suggested the name of M/s. Milan Publicity who did their work of printing their material on vinyl/flex. The appellant paid Service Tax on such transaction where they designed and printed advertisement material and mounted on hoardings for w....
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....fact that services provided by the appellant are not composite service and the same are naturally bundled as per Section 66F(3) of the Act. The appellant provided the main service of selling of space for advertisement and other services such as repair and maintenance or electrification of hoardings, etc. are ancillary to main service for which no separate consideration was charged by the appellant. Therefore, as per section 66F (3) which provides taxability of bundled services, the bundled services provided by the appellant would fall under Negative list. In support of his submission he referred the "Taxation of Services : An Education Guide" dated 20th June, 2012 issued by Central Board of Excise and Customs according to which large number of service receivers of such bundle of services reasonably expect service to be provided as a package then such a package could be treated as naturally bundled in the ordinary course of business and if the nature of service in such bundled services that one of the service is the main service and the other service combined with service are in the nature of incidental or ancillary service which help in better enjoyment of main service then the cla....
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....he respondent in holding that four customers agreed in their statements that the appellant designed and printed the advertising material of vinyl/flex material. The respondent ought to have appreciated that the authorized signatory of M/s. MADISON COMMUNICATION PVT. LTD. deposed that the appellant designed, conceptualized the advertisement material. He in his letter dated 4th September, 2016 stated that they ordered the appellant for displaying the advertisements on hoardings. The appellant in turn managed all work to mounting of the printed advertisement materials on the hoardings. A brief note to the letter clearly states that art work and creating work has been supplied by the client to the appellant. It reveals that the appellant did not provide all these services. He submits that Shri K.N. Prakash Shetty, Finance Controller & Authorized signatory of M/s. Kinetic Advertising India Pvt. Ltd. Which is an advertising agency in his statement dated 16th September, 2016 deposed that in most of the cases the main client (the company) provided the printed vinyl/flex and in other case they provided the design and in that case the advertising agency themselves arranged to print the....
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.... 353 (DEL) c. J&K CIGARETTES Vs. CCE, 2011 (242) ELT 189 (Del.) d. ARYA FIBRES PVT. LTD. Vs. C.C.EX. 2014 (311) ELT 529 (T) 4.1 He submits that provisions of Section 9D of the Central Excise Act, 1944 is applicable in relation to Service Tax in terms of Section 83 of the Finance Act, 1994. He submits that Section 9D of the Central Excise Act provides that statement of any witness will not be considered as an evidence only if such person who made the statement has been examined as a witness by Central Excise Officer and thereafter having regard to the circumstances of the case decides whether it is appropriate to consider the statements of witness as an evidence. Therefore, it is an obligation upon the respondent to examine four customers before placing reliance upon their depositions. He placed reliance on the following judgments:- * ARYA FIBRES PVT. LTD. Vs. C.C.EX. 2014 (311) ELT 529 (T), * Telestar Travels Pvt. Ltd. Vs. Special Directorate of Enforcement, 2013 (289) ELT 3 (SC). 4.2 On the issue of larger period of limitation, he submits that the same is not invocable as there was no deliberate intention on the part of the appellant t....
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....lant has disclosed the details in their Service Tax Returns. The invocation of extended period of limitation and imposing penalty on the appellant is legally not sustainable. 4.5 Without prejudice to submission made on merit of the case it is submitted that in view of principle of valuation provided under Section 67 of the Act, the benefit of cum tax price was not granted to the appellant. It ought to be considered that Section 67 of the Act provides that the gross amount charged for the Services is inclusive of the Service Tax payable in a case when no tax has been separately collected on service and taxes be demanded subsequently. Therefore, the money recovered from the service receiver would have to be considered as cum tax price. He placed reliance on the following judgments:- a. SRI CHAKR TYRES Vs. CCE (MADRAS)- 1999 (108) ELT 361. b. ROHIT DETECTIE & SECURITY AGENCY Vs. C.C.Ex.- 2009 (14) STR 689 (T) c. GEM STAR ENTERPRISES (P) LTD. VS. CCE, 2007 (7) STR 342; 4.6 Shri Hardik Modh, concluding his argument prays that in view of the submission made herein above the impugned order is not sustainable and the same may be set aside and app....
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....der dispute, the services provided by the appellant is summarized as under:- The services as per the above broadly categorized as under:- 1. Selling of space for advertisement on hoarding/Bill boards/kiosk, etc. including electrification and repair and maintenance thereof, during the contract period. 2. Mounting of flex or other printing banners on the said hoardings/bill boards/kiosk where the flex banners of printing banners were included in the consideration. In the second category the appellant have admittedly discharged the service tax and on first category the appellant's contention is that the service is of the sale of space for advertisement therefore, the same falls under Negative List of Services under Section 66D of the Finance Act, 1994 with effect from 1st July, 2012. Negative list was introduced wherein, as per clause (g) of Section 66D of the Finance Act, 1994 selling of space or time slots for advertisements other than advertisements broadcast by radio or television was put in negative list. However, post 01.10.2014 the said entry in the negative list was amended and described as "selling of space for advertisement in print media". The advert....
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....rdings, boards, kiosk, etc. and charge for the same is as per the space provided. 6.6 As per the advertising service display of advertising (in this case sale of space for advertisement) is one of the various advertising service but by virtue of entry provided in the negative list selling of space for advertisement is not taxable. 6.7 In our view, if providing space for advertisement is taxed then the entry provided in the negative list under Section 66D (g) will become redundant. The appellant can be charged service tax only in case where they themselves developed printed vinyl/flex and display the same on their hoardings, board, kiosk, etc. 6.8 Whereas, as per the facts available on record the concept of visualization, conceptualization, preparation of advertisement were done by some other persons and the appellant only provided the space for displaying such advertise therefore, the appellant's activity is clearly limited to "Selling of space or time slots for advertisements other than advertisements broadcast by radio or television". As per the facts, we find that in the present case Customers who intend to advertise their product/service do appr....
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....sic albums, mobile phones, ATM's, films, & television serials (known as product placement). It may be noted that advertisement in print media is excluded." 6.9 As per the above clarification it shows that advertisement on building covers under the scope of advertising space. We further find the respondent has heavily relied upon the statement of Shri Yashwant, Partner of the appellant, Statements of four customers. In this regard we find that Shri Yashwant C. Shah, Partner of the appellant has categorically stated that the advertising agencies approach them to display advertisement of their client. Advertising agency provides printed Vinyl or Flex which was mounted on the hoardings. With this statement it is clear that the appellant are not engaged in creating, making or preparation of advertising material, they only mount the already prepared advertisement on the hoardings and charge for same on monthly basis. 6.10 A similar issue has come up in various case laws. In the case of Team UPD Ltd.-2006 (3) STR 427 (Tri.Chennai) it was held that appellant allowed their site to be used for display of advertisement of other party against payment of rental charges. Appellant....
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.... for adjudication of the case. Since witnesses were not cross examined, their statement cannot be used as evidence. In that case only other documents available on record can be used for deciding the case. As per the documents as discussed above, we do not find that the appellant are engaged in visualizing, conceptualizing , creating, making, preparing the advertisement, these activities are done by advertising agencies who in turn provide the readymade advertising material to the appellant only for displaying on their hoardings. Therefore, firstly the statements particularly in the nature of the present case is not very relevant, secondly the same cannot be relied upon as the same has not passed the test of examination as mandatorily required under section 9D of the Central Excise Act, 1994 which is applicable in the case of Service Tax as per Section 83 of the Finance Act, 1994. 6.16 This issue of cross examination has been considered in various judgments. In the case of BASUDEV GARG V. CC, NEW DELHI-2013 294 ELT 353 (DEL), the Hon'ble Delhi High Court held that the statements against assessee cannot be used without giving them opportunity of cross examining the deponent. I....
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....ification. 8. The appellant vehemently submitted that this is nothing but bundled service and in case of bundled service category of the service would be the nature of the principal service among the bundled service. In this case also even if, we consider that there is a bundled service of sale of spae for advertisement, electrification, repair & maintenance of advertisement/ hoardings as per the invoice of the appellant they are charging for providing the space on monthly basis and there is no variable cost of other ancillary services. Accordingly, the service will be pre-dominantly sale of space for advertisement. The issue of bundled service has been considered by Allahabad Bench of this tribunal in the case of SJP INFRACON LTD.- 2018 (12) TMI 253- CESTAT Allahabad wherein, it was held as under:- "Valuation-bundled service-construction of residential complex service-inclusion of charges on account of External Development Charges, Club Building Charges, Fire Fighting Charges, Electrification Fitting Charges, Park Facing Preferential Location Charges, Electrical Sub Station Charges and such other charges in assessable value- bundling of services- Held that-provisions unde....
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....ssue that in case service was provided prior to 30.09.2014 and invoices were raised after 01.10.2014, Whether the service tax should be chargeable considering the date of service or the date of the invoices. 12. In this regard we are of the clear view that the taxability of the service shall be as per the time of providing the service irrespective of the fact whether the invoice was raised at that time or at later stage. In the fact of the present case when service was provided during the period 01.07.2012 to 30.09.2014 and even if invoices were raised subsequently, the said service will remain non taxable being listed in the negative list. On this issue our view is supported by the following judgments:- 1. RELIANCE INDUSTRIES,- 2008 (10) STR 243 (Tri.Ahd.) which is upheld by the Hon'ble Gujarat High Court recorded in 2010 (90) STR 807 (Guj.) 2. Consultant Engineering Service India Pvt. Ltd.- 2013 (30) STR 586 (Del.) 13. Having held above we find that since the adjudicating authority has not properly seen the correct calculation. In view of the above observation the adjudicating authority has liberty to verify the calculation for the period 01.10....