TaxTMI 
TaxTMI 
2023 (7) TMI 202
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....Tax and allowed their Appeal. Against this Appeal, the Department had filed an Appeal before the Tribunal which was later withdrawn on account of monetary limits. This being so, subsequently, one SCN was issued on 03.06.2008 alleging that the services provided by them amounted to provision of service under Business Auxiliary Services. Subsequently, further SCNs were issued on periodical basis and the demands were confirmed. Being aggrieved by the impugned Orders, the Appellant has filed the present Appeals before the Tribunal. 2. The learned Counsel submits that the Appellant is basically providing service to the Government of Andhra Pradesh and some other clients. The material to be published in the print media is given by such clients. The Appellant approach the print media like various daily newspapers and get these advertisements published. For booking such spaces with the print media, the Appellant pays the advertising charges upfront to the print media. After about sixty days, the Government of Andhra Pradesh and other clients, being satisfied that their advertisements have been properly published in newspapers, pass the bills raised by the Appellant. Thus he submits that ....
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....ir behalf and on such turnovers he is getting commission. As a member of the Indian Newspaper Society, when he books space with the newspapers for such advertisements, he gets the discount. On getting the full value from the client, the discount received by him is the profit margin. After taking into account that they are bearing the cost for the first sixty days and of other office expenses involved in these activities, the profit margin would be less than 5%. Even this amount is purely a profit made by them and cannot be treated as any commission received by him from the print media. He relies on the following case laws: i) EURO RSCG Advertising Ltd vs CCST, Bangalore [2007 (7) STR 277 (Tri-Bang)] ii) Kerala Publicity Bureau vs CCE [2008 (9) STR 101 (Tri-Bang)] iii) McCann Erickson (India) Pvt Ltd vs CST, Delhi [2008 (10) STR 365 (Tri-Del)] iv) CST, Ahmedabad vs Poornima Advertising & Promotion Pvt Ltd [2010 (20) STR 107 (Tri-Ahm)] v) P. Gautam & Co vs CST, Ahmedabad [2011 (24) STR 447 (Tri-Ahm)] vi) CCE, Chandigarh vs Reliant Advertising [2013 (31) STR 166 (Tri- Del)] vii) Grey Worldwide (I) Pvt Ltd vs CST, Mumbai [2....
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....the Appellant. The Revenue claims that this margin is the commission earned by the Appellant for the services provided to the print media. From the records, no evidence has been brought in by the Department to the effect that the Appellant has been appointed as an agent by the print media. Any person can be said to be acting as an agent only when there is specific Agreement between the person engaging the agent clearly specifying the terms of activities to be undertaken by them for the principal and the consideration to be given for such activities. Only then it can be concluded that the person is acting as an agent for the principal. In this case, just because the Appellant happens to be a member of the Indian Newspaper Society and gets concessional rate for getting the advertisements published in the print media, it cannot be concluded that this discount being given is on account of any commission paid by the print media. In this case, it is seen that it is a kind of trading activity in services. The Appellant first books the space by getting certain discount and sells the same at a higher rate to their clients. Therefore, the discount being received by him from the print media i....
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....g authority has neither considered the factual position nor the legality of the entire issue. The impugned order 12/2005 dated 27-4-2005 has no merits. Since there is no service tax liability, there is no question of imposing penalty and demanding interest. Hence we set aside the same and allow the appeal with consequential relief." [Emphasis Supplied] 6. In the case of Kerala Publicity Bureau (cited supra) it is held as under: "3. The brief facts of the case are that the appellants were covered under the category of advertising agencies. The Audit found that they had collected incentives from M/s. Malayala Manorama. The Revenue has considered these receipts as extra commission and had proceeded to recover Service Tax on these amounts by invoking larger period.... 4. The learned Chartered Accountant submits that the above cited case along with the case of M/s. Euro RSCG Advertising Ltd. v. The Commissioner of Service Tax, on this very issue, was decided by this bench in assessees favour. He produced a copy of the Final Order Nos. 60 & 61/2007 dated 27-12-2006 [2007 (7) S.T.R. 277 (Tribunal)] and prays for following the ratio by allowing the appeal. He points ou....
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....tising Ltd. v. CCST, Bangalore reported in 2007 (7) S.T.R. 277 (Tribunal) = (2007) 9 STJ 56 (CESTAT Bangalore) wherein the issue was decided in favour of the appellants..." [Emphasis Supplied] 8. In the case of Poornima Advertising & Promotion Pvt Ltd (cited supra), it is held as under: "2. Heard both the sides. We find that the conclusion of the Commissioner (Appeals) that appellant is eligible for refund on merits is correct. The master circular issued by the board has clarified that merely canvassing advertisement for public on commission basis is not classifiable under the taxable service as advertising agency service. Such services are liable to Service tax under business auxiliary service. Poornima is engaged only booking of space or time. Whenever a request is received, Poornima simply books the space in the newspaper or books the time in the media and thereafter collects the amount paid to the media or newspaper. For this service provided to the client, service charge is collected by them. In fact Poornima gets a discount from the media/newspaper and they pass on a portion of the discount to the clients and retain balance which is their remuneration for the serv....
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....mphasis Supplied] 9. In the case of Reliant Advertising (cited supra), it is held as under: "13. In Euro RSCG Advertising Ltd., ld. Division Bench of this Tribunal has recorded that the appellants (therein) provided advertising services to their various clients and in order to do so, got in touch with media for booking of time slots on various satellite channels for their clients and as per industry practice the broadcasting agency provides 15% discount from their Tariff rate to the appellant. It is this discount on the tariff rate provided by the broadcasting agency that the appellant passes on to its clients and that 15% was brought to tax as income on which Service Tax is exigible. This Tribunal held that there was no evidence on record to the effect that any amount was received by the appellants from the media and ruled that amounts received by the service provider is alone liable to service tax and not amounts received from others. This Tribunal (in Euro RSCG Advertising Ltd.) held that the adjudicating authority failed consider the relevant facts or the legality of the entire issue insofar as issue of cash discount and concluded that cash discount is an income fro....