TaxTMI 
TaxTMI 
2024 (3) TMI 1422
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....ising Co. Pvt. Ltd. 54 Harzratganj Lucknow. 2. I impose Penalty of Rs 1,02,51,252/- (One Crore, two lacs, fifty one thousand two hundred and fifty two) under Section 78(i) of Finance Act, 1994. 3. I impose penalty of Rs 10,73,910/- under Section 76 of F.A. 1994 as was applicable for the period 2007-08. 4. I impose penalty of Rs 10000/- under Section 77(i) of Finance Act, 1994 for non submission of list of records & accounts. 5. I impose penalty of Rs 1,50,000 ( Rs 10000*15 ST-3 returns) under Section 77(2) of Finance Act 1994 for not filing proper ST-3 returns in violation of provision of Section 65 & 70 of the Finance Act, 1994 ibid. 6. The demand to the extent of Rs 20,91,205/- (Rs twenty lacs ninety one thousand two hundred and five) raised against statement of demand No. 07/ADC/LKO/ST/201617 dated 07.04.2016 is also confirmed & shall be recovered from the party. Interest at appropriate rate under section 75 shall also be covered. 7. I also impose penalty of Rs. 2,09,120/- under section 76 read with section 78(B)of the Finance Act, 1994. 8. I also imposed penalty of Rs 20,000/- (Rs 10,000/- for each return) under sec....
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....d 07.04.2016 was issued to the appellant under Section 73 (1A) of the Finance Act, 1994, asking them to show cause as to why- (i) An amount of service tax amounting to Rs 20,91,205/- including Ed. Cess and S.H. Ed. Cess for the period 201415 should not be demanded and recovered from them under Section 73(1) of Finance Act, 1994 for violation of section 68 of the Act ibid read with section 66/66B ibid and rule 6 of Service tax Rule, 1994. (ii) Interest should not be levied and recovered at applicable rate on the above amount of service tax including Ed. Cess and S.H. Ed. Cess under Section 75 of Finance Act, 1994. (iii) Penalty should not be imposed upon them under Section 76 Finance Act, 1994 for non-payment of service tax in accordance with the provisions of Section 68 of Finance Act, 1994 read with section 66/66B ibid and rule 6 of Service tax Rule, 1994. (iv) Penalty should not be imposed upon them under Section 77(2) of Finance Act, 1994 for non filing of service tax return." 2.6 Show cause notice and the statement of demand have been adjudicated by the impugned order referred in para-1 above. Aggrieved appellant has filed this appeal. ....
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....cies, was a trade discount and not commission from the newspaper agencies to the appellant. Activity undertaken by the appellant is neither promotion of sale nor marketing of goods or promoting the provision of the services to their client. Sale of space by the appellant to their client is an independent transaction and purchase of the same other than the purchase of the space by them from the newspaper agencies. From the records of the appellant. * it is evident that net margin between sale of space and purchase of said space ranges between 3.78% to 7.24%. * Whereas department has estimated income of appellant on the business of sale of space for advertisement in print media at 15%. During the same period this fact has laid to this demand. * The issue involved in the present case has been considered by Hyderabad Bench of this Tribunal in the case of M/s Varadhi Advertisers Pvt. Ltd. Final Order No. A/3061330168/2023 dated 04.07.2023 and has been settled in favour of the assessee. * In view of the above, the appeal needs to be allowed. 3.3 Arguing for the revenue learned Authorised Representative reiterates the facts recorded in the impugned o....
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....ut at the same time party is a commission agent too. In this regard it should be kept in mind that party is not getting any consideration in lieu of services provided to the advertiser. What they get is the commission from the media. Therefore as per above state clause (b) services provided by the party falls under the category of BAS as commission gives them their essential character. Therefore I found that demand of Service Tax from the party under B.A.S is correct & proper. I found that by the Finance Act 2012, radical changes have been made in the Finance Act, 1994 by providing that service tax is payable on all services rendered in taxable territory except for "negative list" of service specified in Section 66D. Thus w.e.f. 01.07.12 service tax has become leviable on all the services which satisfy the definition of service inserted with effect from that date, except those specified under 66D. Accordingly vide circular No. 161/12/2012 dated 06.07.2012 accounting code for the purpose of payment of service tax under the negative list based comprehensive approach to taxation of service effective form 01.07.2012 [all taxable services - 00441089] was prescribed. However sub....
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.... amount of Commission accrued in respect of advertisement ate commercial rates or net income from said commission is taxable. Party has inter-alia stated that difference between taxable value shown in the balance sheet & Service tax returns is due to exclusion of the amount of work done at DAVP rates, we were not paying service tax on the advertising agency service rendered at DAVP rates, DAVP is a Commercial concern & is not liable to service tax which was clarified by the Boards vide its letter dated 31.10.96, PRO Eastern Railways Gorakhpur vide letter dated 31.10.2012 has clarified that no service tax is to be paid on print media advertisement published at DAVP rates. I found that party in attempt to justify short payment of service tax on services provided by them is trying to twist the meaning & misinterpret the language used in above said letters. Board's letter dated 31.10.96 (F.No. 341/43/96-TRU) is regarding clarification on scope of service tax on advertising, Courier & pager services. Para 10 of said letter read as under- A point has been raised whether Directorate of Audio & Visual Publicity (DAVP) in the Ministry of information & Broadcas....
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....ion which they retain with them from the total discount of 15% as per CBEC clarification issued vide F. No. 341/43/96-TRU dated 31.10.96. In this regard I observe that para 4 of said letter relates to valuation of taxable service of advertising agency service which is read under. "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 under takes the making or preparation of advertisement or gets it done through another person. However the amount paid, excluding their own commission by the advertising agency for space and time in getting the advertisement published in the print media (i.e. news papers, periodicals etc) or the electronic media (Doordarshan, Private TV channels, AIR etc.) will not be includible in the value of taxable service for the purpose of levy of service tax. The Commission received by the adverti....
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....ng service tax on the sale of time slot for advertisement, which is to be collected and paid by Radio Mantra. The said deduction is proper as on this amount of commission, service tax is to be paid by party not by Radio Mantra. Therefore this invoice also proves that the service tax on such commission is to be paid by the party not otherwise. Further party vide his letter dated 18.04.2015 has submitted some copies of invoices raised by them. I found that on the invoices service tax @ 1.54% has been charged. At no point of time service tax rate was 1.54%., actually 1.94% is 15% of 10.3%, which is the applicable rate of service tax at the time of issuance of such invoices. This type of practice is normally used by the provider of such services, on which abatement of certain percentage is available. From this it is evident that party was well aware that 15% of value is taxable & intentionally has not paid due tax. Regarding party's submission that service tax paid shown in SCN is less than actually paid. I found that the party has paid penalty and interest & same has not been considered in computing short paid service tax which is correct. Regarding quan....
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....mputation of Demand From impugned order it is evident the demand has been worked out by the Commissioner on the basis of assumption that the total commission received by the appellant during entire period of dispute was on the activities shown as ―Press Release & Job Work Paid‖ was 15% of the amount paid for such activities. In the impugned order the demand has been worked out in the table as indicated below: Period Amount shown as "Press Release & Job Work Paid" in the balance sheet (85%) Actual Commission accrued, amount of Col. 2/85* 15 (15%) Rate of Service Tax Including Ed. Cess & H. Ed. Cess Service Tax payable Service Tax Paid Differential Service Tax liability 1 2 3 4 5 6 7 2007-08 56258831 9928029 12.36% 1227104 36161 1190943 2008-09 75280893 13284863 12.36% 1642009 158849 1483160 2009-10 70516209 12444037 10.30% 1281736 46962 1234774 2010-11 88810242 15672396 10.30% 1614257 56537 1557720 2011-12 102004125 18000728 10.30% 1854075 208270 164580....
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.... 102004125 4139587 3.9 2012-13 107753459 99949909 7803550 7.24 2013-14 111709254 104267469 7441785 6.66 2014-15 112794231 96537898 16256333 14.41 Total 743203984 693625579 49578406 6.67 Thus the entire demand made in the show cause notice and the impugned order is based on presumed commission of 15% whereas the actual value of sales margin is available and on the basis of the said commission works out year wise as indicated in column 5 of the table above. If the commission was even to be averaged out the same would have been only 6.67% as per the figures indicated in the SCN and impugned order on the basis of Balance Sheets/ Profit and Loss Account of the appellant. From the invoices raised by the print media on the appellant and by the appellant on their clients it is evident that normally appellants were getting discount of 15% from the print media, and they were in turn passing certain discounts to their clients while billing them. In certain cases it may be that no discount has been passed and on the basis of the those document both show cause notice and impugned order presume that commission earned by the a....
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....ished, the Appellant gets an invoice from the print media wherein they are giving discount of 10%-15%. After the advertisement is published, the Appellant is raising the invoice on Government of Andhra Pradesh and other clients wherein he is charging the full amount. The difference between the invoice raised by the Appellant on their clients and invoice raised on the Appellant by the print media is the margin which is available to 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....
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....emitted to the exchequer by the media agency. The appellants have demonstrated that they have not received any amount from the media. They got only a discount from them. Perhaps the word "commission" is misleading. There is actually no evidence that the said amount has been received by the appellant from the media. In any case, any amount received by the service provider from his client only is liable to service tax and not amounts received from others. The adjudicating 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 proce....
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....g print, electronic media etc. The tax authorities should see whether the appellants had discharged duty liability on the gross amount received from their clients. In this case, the various media are not clients of the appellant namely, the advertising agency. If the media gives discount of 15% to the appellant, that amount has nothing to do with the gross amount received by the appellant from their clients to whom they rendered advertisement services. Therefore, there is no logic in demanding service tax on the discount of 15% received by the appellant from print media. Identical issue was the subject matter of the Tribunal in the case of Euro RSCG Advertising 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 a....
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....ess auxiliary services. It is seen and as correctly pointed out by the learned counsel that the Coordinate Bench of the Tribunal in the three cases as cited herein above, have held that the discounts/incentives received by the assessee from the print media will not be liable for service tax under the category of advertising agency services. If that be so, the said discounts/incentives itself cannot be considered for the purpose of taxability under the head business auxiliary services as the amounts which are received are in respect of the services provided under the category of advertising agency services and the amount are discounts and incentives and not as charges for services." [Emphasis 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....
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....s contention that on the incentives received, the appellant is liable to Service Tax under BAS. This was the view taken by this Tribunal consistently in a series of decisions starting from Euro RSCG Advertising Ltd. (cited supra). . . ......... Therefore, it can be seen that the Tribunal has been consistently taking the stand that incentives received by an advertising agency from the media without any contractual obligation to render any service cannot be levied to Service Tax under the category of BAS. Following the ratio laid down in these decisions, in the present case also, we hold that the demands on the amounts received from the media cannot be levied to Service Tax under BAS." [Emphasis Supplied] 11. From these case laws, it gets clarified that the issue is no more res integra. The amount of incentive received by the Advertising Agency from the print media has been under litigation and the Tribunals have been consistently holding that such incentives or discounts cannot be termed as Business Auxiliary Service. 12. On going through the case law relied upon by the Revenue, Malar Publications Ltd (cited supra), it is seen that the....
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.... is excluded. In case of Reliant Advertising [2013 (31) S.T.R. 166 (Tri. - Del)] Delhi bench held as follows: "6. Section 65(2) of the Finance Act, 1994 (hereinafter the Act) defines "advertisement" as including "any notice, circular, label, wrapper, document, hoarding or any other audio or visual representation made by means of light, sound, smoke or gas." Sub-Section (3) of Section 65 defines "advertising agency" as meaning any person engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant". Sub-section (105) of Section 65 read with clause (e) thereof defines a taxable service (in the context) as a service provided to any client, by an advertising agency in relation to advertisement, in any manner and clause (zzzm) of Section 65(105) defines the relevant taxable service as service provided to any person, by any other person, in relation to sale of space or time for advertisement, in any manner; but excluding sale of space for advertisement print media and sale of time slots by a broadcasting agency or organisation. Explanation (1) to Section 65(105)(zzzm) defines the express....
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....ertisements would occupy, negotiating the price, informing the general lay out of the advertisement were not involved, then service tax was not liable on such canvassing. Relying on the judgment of the Tribunal at Bangalore in Euro RSCG Advertising Limited v. Commissioner of CST, Bangalore - 2007 (7) S.T.R. 277 (Tri.-Bangalore) wherein it was held that the amounts received as cash discount and incentives were not liable to service tax since no service was provided by the advertising agency to the media, the Commissioner (Appeals) recorded that the incentives or cash discounts shown as commission in the balance sheet of the appellant were not liable to service tax. Aggrieved by the order, the Revenue went in appeal before the Tribunal. The Tribunal while reversing the order passed by the Commissioner (Appeals), vide order dated 9-4-2013, Annexure A.9 recorded that the assessee was not assessed to service tax on any transaction involving sale of space for advertisement in print media. It was concluded that the activity of the appellant-assessee fell within the taxable service of "advertising agency". The relevant findings read as under :- "6. Section 65(2) of the Finance Act....
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....ut by the learned counsel for the respondents, in the adjudication order dated 2-7-2007, Annexure A.5, in answer to the question whether the appellant collected service tax from its clients on all the bills raised by it, Mrs. Shaifali Singh, partner of the assessee made statement on 23-8-2006 wherein it was stated that it received 15% commission from the newspapers on gross business with them and collected service tax on that commission from its clients on the bills raised by it. The relevant portion read thus :- "Q.5 : How do you raise bills to your clients and collect Advertising charges and whether it includes service tax? How do you arrive at the taxable value for payment of service tax? Have you collected service tax from your clients on all the bills raised by you? A : We received 15% commission from the newspapers on gross business with them and we collect service tax on this commission from our clients on the bills raised by us." Still further, in answer to Question No. 6 also, the correctness of the figures of turnover from advertising business was admitted. The relevant portion thereof is as under :- "Q.6 : In your balance sheets the fi....
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.... In view of the decisions as above we are clear that the services provided by the Appellant would be the service of sale of space for advertisement in print media and would be covered under Negative List specified by Section 66D of the Finance Act, 1994 with effect from 01.07.2012. Accordingly we do not find any merits in the impugned order demanding the service tax on these services provided by the appellant, by way of sale space for advertisement in print media with effect from 01.07.20012. 4.12 As we find that the case cannot be upheld on the merits itself we are not considering the issue of limitation. As the demand of tax is set aside the penalties imposed too are set aside. 4.13 Thus we do not find any merits in the impugned order. 5.1 Appeal is allowed. (Pronounced in open court on-12 March, 2024). ============= Document 1 PUBLICATIONS LTD. LUCKNOW, UTTAR PRADESH 226001 AMAR UJALA 3-A, TILAK MARG, DALIBAGH : ANU IMAGE AD MAKERS (P) LTD 54,HAZRATGANJ .LUCKNOW Invoice No: D-LKN-13050258 Date RO No. 13-05-2013 13358 r ent/Ag: NER and .on ivassor: >duct : NONE MISCELLANEOUS RO Date : 10-05-2013 I....
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....टः 1. सà¤à¥€ पà¥à¤°à¤•à¤¾à¤° के à¤à¥à¤—तान रेखांकित चेक दà¥à¤µà¤¾à¤°à¤¾ JAGRAN PRAKASHAN LTD. के नाम à¤à¥‡à¤œà¥‡à¤‚। 2. यदि à¤à¥à¤—तान राशि सात दिनों के अनà¥à¤¦à¤° पà¥à¤°à¤¾à¤ªà¥à¤¤ नहीं होती है तो 15% पà¥à¤°à¤¤à¤¿à¤µà¤°à¥à¤· की दर से बà¥à¤¯à¤¾à¤œ देय होगा। Total Amount Ag. Discount 15% Net Bill Amount 21162.24 3174.33 17987.90 (लेखा विà¤à¤¾à¤—) Anu Image Makers Adve Private Limited Director PAN ACIDA Document 3 Siyasat Jadid INDIA'S LEADING URDU DAILY (A Publication of M/s. DAILY SIYASAT JADID, Kanpur) سیاست ....
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....स टाइमिंग पà¥à¤°à¤¿à¤¯ महोदय, लखनऊ विषय: विजà¥à¤žà¤¾à¤ªà¤¨ की संखà¥à¤¯à¤¾ पूरà¥à¤µà¥‹à¤¤à¥à¤¤à¤° रेलवे विजà¥à¤žà¤¾à¤ªà¤¨ आदेश अति आवशà¥à¤¯à¤• गोर दिनांक 10-5-2013 विवा मला सखà¥à¤¯à¤¾ वा|16 विजà¥à¤žà¤¾à¤ªà¤¨ | यूटीà¤à¤¸ / 13 मà¥à¤¨à¤¾à¤•à¤¿ [110 = 23 इस कारà¥à¤¯à¤¾à¤²à¤¯ पतà¥à¤° क ज / 573 /0/ 1 à¤à¤¾à¤—-2 दिनांक 29-00-2009 के अनà¥à¤¸à¤¾à¤° निमà¥à¤¨à¤²à¤¿à¤–ित समाचार पतà¥....
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....¥à¤¤à¥à¤¤ करते समय समाचार पतà¥à¤°à¥‹à¤‚ को à¤à¤•-à¤à¤• बिल तथा आदेश जो समाचार पतà¥à¤°à¥‹à¤‚ को जारी किया कर कोई असà¥à¤µà¤¿à¤§à¤¾ न हो। (2) विजà¥à¤žà¤¾à¤ªà¤¨ पà¥à¤°à¤•à¤¾à¤¶à¤¿à¤¤ होने के 60 दिनों को à¤à¥€ लिंगा Document 6 कारà¥à¤¯à¤¾à¤²à¤¯ लखनऊ विकास पà¥à¤°à¤¾à¤§à¤¿à¤•à¤°à¤£, लखनऊ पà¥à¤°à¥‡à¤·à¤• : - सहायक जन समà¥à¤ªà¤°à¥à¤• अधिकारी सेवा में,....
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....त साईज 08x12 सेनà¥à¤Ÿà¥€à¤®à¥€à¤Ÿà¤° में पà¥à¤°à¤•à¤¾à¤¶à¤¿à¤¤ कराया जाय à¤à¤µà¤‚ पà¥à¤°à¤•à¤¾à¤¶à¤¨ उपरानà¥à¤¤ उसी दिन समाचार पतà¥à¤° की तीन पà¥à¤°à¤¤à¤¿à¤¯à¤¾à¤‚ à¤à¤µà¤‚ डी.वी.डी. जन-समà¥à¤ªà¤°à¥à¤• कारà¥à¤¯à¤¾à¤²à¤¯ में पà¥à¤°à¤¾à¤¤à¤ƒ 10:00 बजे पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ कर दें । दिये गये निरà¥à¤¦à¥‡à¤¶à¥‹à¤‚ के विपरीत विजà¥à¤žà¤¾à¤ªà¤¨ पà¥à¤°à¤•à¤¾à¤¶à¤¿à¤¤ होने पर आपकà¥....
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....on and this in the paries bent the artistering age shall be refered to these pp by the CD of The Linient Suchair may be an employer of the Company. The venue for abionice shall be Membanda The Minion proming shall be gormed by the Abia and Conclusion A, 1998 The proceding of what bein English gay The Abditing The paris here shall the Abe' and the be be The band cd in accordance with the laws of to the video of us have exchive jurisdicion E.&O.E. End: VOUCHER TEAR SHEETS/RELEASE ORDER COPY Document 8 सà¥à¤µà¤¤à¤‚तà¥à¤° चेतना SWATANTRA CHETNA D.A.CHETNA PRAKASHAN PVT.LTD. CHETNA BHAWAN,SHAH MAROOF,GORAKHPUR.U.P. FAX NO:8551-2341810 email id: [email protected] Invoice No Ad0289/13 Edition Lucknow Date 11-05-2013 M/S ANU IMAGE MAKER'S INS MEMBER LUCKNOW Client-Lucknow Develpment Authority MONTH PUBLICATION May 2013 R.O. No. 13365 DISCRIPTION SIZE RATE AMOUNT REM. 11-05-2013 12 x 8=96 23.90 2294.40 Trade Discount 15%-344.16 "Anu Image Makers Advertising 1960.24 Private Limited One Thousand Nine Hundred Fifty Only Director FOR SWATAN....