TMI Blog2006 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of fee based clients, the appellants charged the clients a fixed fee per month irrespective of whether any advertisement is broadcast or not. In respect of these clients, the appellants provide advertising service by engaging print media, TV channels and charge the clients without any mark up and pass on the discount given to them by the Broadcasting agency. Suppose the Tariff rate charged by the broadcasting agency is Rs. 100/-, they give 15% discount to the appellants. As a result, they charge only Rs. 85/- along with 10.5% service tax which they have to pay to the Exchequer. The appellants passed on the discount given to them by the broadcasting agency by charging Rs. 85/- plus 10.5% service tax from their clients. Revenue has issued a Show Cause Notice for payment of service tax on the 15% discount given to the appellants by the broadcasting agency. The Jurisdictional Commissioner confirmed a demand of Rs. 55,05,725/- in terms of Section 75(1) of Finance Act 1994. The details of the amount are given in Annexure II of Show Cause Notice. Interest under Section 75 has been demanded. Penalty under Section 76 at the rate of 200/- per day has been imposed. A penalty of Rs. 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service rendered to their client nor is it passed on to their clients. Lower authority confirmed the proposals in the Show Cause Notice. He demanded service tax of Rs. Interest under Section 75 of the Finance Act has been demanded. Penalty of Rs. 100/- per day were demanded under Section 76 of the Finance Act, 1994. A penalty equal to the service tax amount confirmed was imposed under Section 78 of the Finance Act, 1994. The Commissioner (Appeals) in the impugned order upheld the order of the lower authority. Hence the appellants have come before the Tribunal for relief. 6. Shri Raghuraman, learned Advocate appeared for the appellants and Shri R.K. Singla, learned Jt. CDR appeared for the Revenue. 7. The learned Advocate urged the following :- (i) The cash discount and incentives for target achieved have nothing to do with the rendering of services by the appellants to their clients and therefore they are not liable to be included as value of the tax able services. (ii) The cash discount is received when the appellants make prompt payment of bills to the media. It is not for the services rendered to their clients and hence this amount is not liable for service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence are not collecting commissions on Individual Invoices and therefore no service tax is paid on Individual bills Intel Print TV Others Bill @ net Bill @ Gross Commn @ 15% ST Payable Up to May 03 0 0 0 0 0 0 0 From Jun 03 to Sep 04 160929754 108149442 2366691 271445887 310213102 47902215 3832177 From Oct 04 to Dec 04 23303363 44376048 1355000 69034411 81216954 12182543 1242619 Dell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of service tax on payment received by them towards retainership arrangement. The assessee inter alia stated that they charge lump sum amount of fee on periodic to their clients and that the amount of service tax due on such receipts is deposited. The evidences on record do not corroborate the contention of the assessee. Annexure II to the Show Cause Notice clearly mentioned that the assessee received retainership payment/agency fee to the tune of 6,52,27,619/- from their clients (up to May 03, from June 03 to Sep 04 and Oct 04 to Dec 04). The service tax liability on the aforesaid amount of agency fee/lump sum payment was computed to be Rs. 55,05,725/- and the assessee could not adduce any documentary evidence to substantiate their claim that the service tax amount due on such receipts had been duly paid. There is no evidence regarding payment of Rs. 55.05 lakhs (approx.) towards service tax during the aforesaid period. No evidence has been brought on record by the assessee to the effect that the service tax liability on the lump sum payment received from the clients was discharged by them, in duly prescribed manner. Since Service Tax was legally paid on the said lump sum pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- along with service tax. The service tax component received from the advertising agency in turn is remitted 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. 10. As regards the second appeal, the service tax has been demanded on the amounts received as (i) cash discount (ii) target incentives. The Show Cause Notice dated 17-2-2005 itself makes it clear that these amounts have been received from the media. Since these amounts have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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