Case Law Details
The issue involved in the matter is whether the trade discount amounts received by the appellant to be treated as commission and taxable under the Business Auxiliary Service or not. The liability in that regard is essentially to be decided on the basis of the provisions of law comprised under the service tax statute. Besides the provisions of the said rules which are brought to our notice rather than disclosing principal to principal relationship between the publisher of the newspaper and the appellants, overall reading of the said rules disclose certain disciplinary control by the Newspaper Society over the appellants as far as it relates to advertising services are concerned which would, prima-facie, disclose the trade discount to be in the nature of commission to the agents.
Prima facie, therefore, we do not find any infirmity in the concurrent findings in that regard arrived at by the authorities below. Hence, we do not find any case for stay of the impugned order. However, taking into consideration of the facts and circumstances of the case, we direct the appellants to deposit a sum of Rs. 5 lakhs (Rupees five lakhs only) within a period of eight weeks while waiving the balance amount demanded under the impugned order. Compliance to be reported on 29/11/2010.
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, BANGALORE
Application No. ST/St/463/2009
Appeal No. ST/757/2009
STAY ORDER NO. 740/2010
M/s VARADHI ADVERTISERS PVT LTD
Vs
CCE, HYDERABAD
Date of Decision: 06.09.2010
Judgement
Per: R M S Khandeparkar:
The present application has been filed in the appeal arising from the order passed by Commissioner (Appeals), Hyderabad on 20/05/2009. By the impugned order, the liability of the appellant to pay the service tax in terms of the order of the Adjudicating Authority dt. 31/10/2008 has been confirmed but the actual liability has been restricted for the period of one year only as the demand in relation to the period beyond one year has been held to be barred by limitation.
2. The ld. Advocate for the appellants while referring to Rule 32 read with Rule 24 of Rules governing Accredition of Advertising Agencies, and placing in the order of the Tribunal in the case of Mudra Communications (P) Ltd. Vs. CCE, Calicut reported in 2010 (18) STR 48 (Tri. Bang.) submitted that the appellants are providing advertising agency services and are members of Indian Newspaper Society and are governed by the said rules and transactions between the publisher of the newspaper and the appellants are on principal to principal basis and therefore, the trade discount received by the appellants is not in the form of commission agents. The definition of taxable services excludes the activity of sale of space for advertisement in print media and considering the nature of activity by the appellants, the same does not warrant the service tax in relation to the trade discount so received on such services.
3. On the other hand, the ld. DR submits that the point sought to be raised was referred for the clarification by the Board and has been answered under Circular No. 96/7/2007-S.T. dt. 23/8/2007 that though merely canvassing for advertisements for publishing on commission basis is not classifiable as taxable service falling under Section 65(105)(e), the advertising services are liable to service tax under Business Auxiliary Service in terms of Section 65(105)(zzp), and considering the same, no fault can be found with the impugned order.
4. The ld. Advocate for the appellants has also drawn our attention to a notice received by the appellant on 29/1/2010 from the Indian Newspaper Society, while arguing that in terms of Rule 24 and 25, the limitation for payment of monthly bills by the members of the Society has been fixed to be 60 days irrespective of the fact whether the payment of the advertisement has been received from the clients or not.
4. The issue involved in the matter is whether the trade discount amounts received by the appellant to be treated as commission and taxable under the Business Auxiliary Service or not. The liability in that regard is essentially to be decided on the basis of the provisions of law comprised under the service tax statute. Besides the provisions of the said rules which are brought to our notice rather than disclosing principal to principal relationship between the publisher of the newspaper and the appellants, overall reading of the said rules disclose certain disciplinary control by the Newspaper Society over the appellants as far as it relates to advertising services are concerned which would, prima-facie, disclose the trade discount to be in the nature of commission to the agents. Prima facie, therefore, we do not find any infirmity in the concurrent findings in that regard arrived at by the authorities below. Hence, we do not find any case for stay of the impugned order. However, taking into consideration of the facts and circumstances of the case, we direct the appellants to deposit a sum of Rs.5 lakhs (Rupees five lakhs only) within a period of eight weeks while waiving the balance amount demanded under the impugned order. Compliance to be reported on 29/11/2010.
(Pronounced & dictated in open Court)
