TaxTMI 
TaxTMI 
2024 (2) TMI 438
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....s engaged in the business of Advertisement Agency Service and 'Selling of Space for Advertisements'. The Appellant was registered with Central Excise as service provider vide Registration No. AAIFN2789HSD002. The business commenced in the month of March, 2011. Until September, 2012, the Appellant was doing the business of advertisement agency service and was paying service tax on the aforesaid activities. With effect from 01.10.2012, the Appellant had obtained sub-contract from M/s Chinar Impex, C-22/4, Sector-57, Noida for constructing and maintaining Bus Shelters, Foot Over Bridges and Toilets (Public Utilities) etc. which were awarded from Noida Authority to M/s Chinar Impex, on Build Operate Transfer (BOT) basis and in turn obtained right for advertisement on such constructed structures from awarding agencies for a specified period. The nature and module of the business of the Appellant was that they allowed different clients to display advertisement on pre-assigned space of the structure constructed by M/s Chirag Impex on rental basis. The consideration from clients was charged on the basis of time period for displaying the advertisement, site of advertisement, location, area ....
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....y Adhlakha was recorded on the spot on 16.11.2015 and subsequently on 04.12.2015. Documents namely, ST-2 (Registration Certificate), ST-3 Returns, Balance Sheets for F.Y 2012-13 to 2015-16 were submitted by the Appellant. On the basis of statements of Shri Sanjay Adhlakha and the documents submitted, it was alleged that service being rendered by the Appellant was not under the category of 'Selling of Space or Time for Advertisements other than Advertisements by Broadcast by Radio or Television' but the same was 'Advertisement Service' and was not covered in 'Negative List' during the period from 01.07.12 to 30.09.14. The investigation culminated in issuing of a Show Cause Notice dated 05.12.2018 by way of demand of service tax on the services rendered by them treating the services under the category of 'Advertisement Agency' for the period 01.10.2012 to 30.09.2015 under the proviso to Section 73(1) of the Finance Act, 1994 read with section 174 of the Central Goods & Services Tax Act, 2017 along with interest and also appropriation of the amount already deposited by the Appellant against the demand to be recovered from the Appellant. Besides demand, penalty under section 78 of the ....
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....demand of late fee. 6. Shri Abhinav Kalra, Chartered Accountant represented the case on behalf the Appellant and contended that services rendered by the Appellant were not chargeable to service tax with effect from 01.10.2012 as services provided by them were under the category of 'Sale of Space for Advertisement' which were in the Negative List as provided under Section 68(g) of the Finance Act, 1994 during the period from 01.07.2012 to 30.09.2014 but the same was rejected by the Adjudicating Authority without any proper ground. The Appellant got registration as 'Advertising Agency' but they did not provide the said service with effect from 1.10.2012. It was contended that there was no statutory definition of 'Advertisement Agency' in the Finance Act, 1994 after implementation of 'Negative List'. However, there was statutory definition of 'Advertisement Agency' prior to 1.7.12 in Section 65(3) of the Finance Act,1994 on the basis of which, the activity of the Appellant was classified under the category of 'Advertisement Agency'. It was also submitted that no evidence was adduced by the department to show that the Appellant was engaged in making or preparing or advising for advert....
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....8. It was also submitted that there was no malafide intention on the part of the Appellant to conceal the value of taxable services from the Department. In fact, they declared the value of services provided by them in the ST-3 returns and claimed exemption. Accordingly, it is not a fit case for invoking extended period as provided under Section 73(1) of the Finance Act, 1994. Since the value of the service was declared in the ST-3 return, it was in the knowledge of the department that the Appellant had not paid service tax on certain value of services provided by them, then the Department was free to initiate action to recover the tax by issuing the show cause notice within 30 months from the date of filing of ST-3 returns for the relevant period. 9. It was also submitted that the demand under the proviso to Section 73(1) of the Finance Act, 1994 has wrongly been raised against the Appellant. Therefore, the penalty imposed under Section 78 is also unwarranted. It is submitted that the penalty under Section 78 can be imposed only in the cases where the elements of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of Chapte....
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....the Appellant by confirming the demand of Service Tax. The finding of the Ld. Adjudicating Authority is as below:- " Further it is also a fact that the party had obtained registration from Service Tax department for providing Advertisement Agency Service and accordingly filed their ST-3 returns declaring the nomenclature of service provided as Advertisement Agency Service. I also find that the burden of proof was on the party to provide evidences showing the services of Rent of sale of space for advertisement if any provided by them during the alleged period." The Adjudicating Authority has held the service rendered by the Appellant under the category of 'Advertising Agency services' on the basis of Registration Certificate in ST-2 format, ST-3 returns and statement of Shri Sanjay Adhlakha and confirmed the demand of service tax for the period 01.10.2012 to 30.09.2014. It has been observed by the Adjudicating Authority that description of service in ST-2 certificate was Advertising Agency service and on that basis it was held that the Appellant provided Advertising Agency service. As regards description of services in ST-2 certificate, it is found that at Sl.No.7 in ST-1 applica....
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....nable. As far as documentary evidence is concerned for verifying the fact that the Appellant was rendering selling of space for advertisement, invoices issued by the Appellant can be seen where amount charged was only in respect of displaying advertisement on hoarding, bill-board, Gantries etc. on monthly rental basis. No other charges were collected by the appellant from his clients. The nature of invoicing clearly indicates that service provided by the appellant was selling of space for advertisement. The Appellant had furnished each and every document / information as and when desired by the departmental officers. The department had all powers to call or collect the desired information from the Appellant or from the clients of the Appellants to ascertain the document/information required by them. Burden lies on the department to prove the allegation. It cannot be shifted on the Appellant. In this context, reliance is placed upon the following case laws wherein it has been established that the revenue has to establish on the basis of facts and circumstances from which a reasonable inference could be drawn that the assessee had attempted to evade tax. (i) The Hon'ble Supreme Cou....
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....prior to 30.09.2012 and post 30.09.2014 and no Service Tax was paid on the said services during interregnum period 01.10.2012 to 30.09.2014. He referred to the definition of advertising agency and submits that advertising agency includes making, preparation, display or exhibition of advertisement and includes the advertising consultant. The Appellant is providing service of displaying the advertisement through various mode such as hoarding, kiosk, etc. However, he is not providing the services like basic planning of advertising, preparing the detail exhibition program for advertisement. On the basis of planning, printing of the material for display or exhibition the service of selling of space or time slots for advertisements falls under negative list of Services specified under Section 66D (g). We find that the words "selling of space or time slots" for advertisement are not defined in the act therefore, the meaning of these words is to be understood in commercial parlance which means providing space for displaying advertisement. At the time of introduction of new service, the Joint Secretary, Ministry of Finance, Department of Revenue, Government of India issued a clarification ....
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.... charges at 5Metro Pillars at City Centre Noida @Rs.20000/ per month per pillar, -Display charges at FOB at Amity & Sai Mandir Noida @Rs.150000/ & Rs.60000 per month. Nature of job in all invoices was shown as advertising through outdoor hoarding. It may be seen from the above invoices that charges were collected from clients only for display through hording for a certain period as mentioned in the invoices. From the nature of invoices it is evident that the consideration was in the form of rental charges for space provided for displaying the advertisement. There was no charge for any other activities as per the invoices. Display of advertisement on some specified place was exempted from service tax because of entry of 'selling of space for advertisement' under Section 66D (g) in Negative List. The customer or client approaches the appellant with advertisement material and the appellant displayed the same on a space for a particular period and charge the customer on monthly basis. After expiry of the period the advertisement is removed. Such activities of providing space for displaying advertisement was covered in the Negative list and as such not taxable. It is evident from t....