2026 (4) TMI 152

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....ents in the panel for consideration. The money earned from advertising using the panel, according to Revenue, constituted the consideration and should be adopted as the taxable value. During audit, the amount received as consideration for sale of advertising space without paying Service Tax was quantified as Rs.9,89,354/- for the period April 2004 to March 2008. Accordingly, a Show Cause Notice was issued for recovery of tax along with interest and penalties. The adjudicating authority confirmed the demand with interest and imposed penalties under Sections 76 and 78 of the Finance Act, 1994. The appeal before the Commissioner (Appeals) was rejected, leading to the present appeal. 3. The learned Advocate Shri J. Shankarraman appeared for the appellant and Ld. Authorized Representative Smt. Anandalakshmi Ganeshram, appeared for the respondent. 3.1 Shri J. Shankarraman the Ld. Counsel for the appellant submitted as follows: A. The Appellant merely installed timer devices at traffic signals with police permission and commercially exploited the space below by displaying company names without any designing, conceptualizing, or creative input. Such activity amounts only to ....

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....-contractor is not tenable, as the law does not exclude sub-contractors from tax liability. D. Failure to disclose the sale of advertisement space and consideration received amounts to suppression of facts, justifying invocation of the extended limitation period under Section 73(1). E. She relied upon the following judgments in support of her averments: a. Image Advertising Vs Commissioner of Service Tax, Delhi [(2024) 17 Centax 283 (Tri-Del)] b. Image Advertising Vs Commissioner of Service Tax, Delhi [(2024) 14 Centax 191 (Del)] c. Commissioner Vs Melange Developers Pvt Ltd. [2019 (6) TMI 518 CESTAT NEW DELHI - LB] The Ld. A.R. prayed that the appeal may be rejected. 4. We have heard both parties and examined the appeals and the connected judgment. The issue is whether displaying company names beneath traffic signal timer devices, without any design, conceptualization, or creative input, by the appellant, constitutes the rendering of "Advertisement Agency Service". 5. It would be helpful to extract the relevant provisions of the Finance Act 1994, concerning the dispute: Section 65(3) states: "advertising....

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....not provide any service to the advertisers, but are merely selling space or time for the exhibition of advertisements. 3. In the case of persons who are printing and publishing telephone directories, yellow pages or business directories, their activity is essentially of printing a readymade advertisements from the advertisers and publishing the same in the directory. Their activities are similar to those carried out by newspapers or periodicals. As such, this activity shall not attract service tax. However, if these persons also undertake any activity relating to making or preparation of an advertisement, such as designing, visualising, conceptualising etc., then they will be liable to pay service tax on the charges made thereon." 5. It is apparent from this letter that the activity of printing and publishing yellow pages does not attract service tax. However, Service Tax is attracted on advertising agencies which are providing services to advertisers by conceptualising, designing or preparing advertisement. This circular was not considered by both the lower authorities. Further, there is no finding given on the question of applicability of time limit in the impug....

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....Hon'ble Justice K.K. Usha, President, CESTAT, held as under : "Service Tax - Advertising Agency - Respondents permitting display of advertisement on its site and raising bills for realizing rental charges - Such activity not bring the respondents under the definition of advertising agency - Section 65(2) of Finance Act, 1994." In the present case also, the respondent has hired space in Metro Railway Coaches and in turn provides space to its client for advertisement. The facts of the present case are similar to that of Commissioner of Central Excise, Ludhiana Vs Azad Publications (supra). In view of the above, I do not find any merits in the present appeal and appeal deserves to be dismissed. 6. Consequently, I dismiss the appeal filed by the Revenue." 8. It emerges from the foregoing discussion that, under Section 65(3) of the Finance Act, 1994, service tax applies only where services of making, preparation, display or exhibition of advertisement are rendered. As per CBEC's clarification dated 16.08.1999, these should involve activities such as designing, visualising, or conceptualising advertisements. Mere sale of space does not attract tax as 'Advert....