TMI Blog2007 (5) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act has been confirmed besides penalty of like sum under Section 78 of the Act. 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 front M/s. Malayala Manorama. The Revenue has considered these receipts as extra commission and had proceeded to recover Service Tax on these amounts by invoking larger period. In this case, by Stay order No. 881/2006 dated 25-8-2006, this Bench was pleased to grant waiver of pre-deposit following the ratio of earlier stay Order No. 476/2006 dated 17-5-2006 [2006 (4) S.T.R. 136 (Tribunal)] rendered in similar matter as in the case of M/s. Marketing Consultants Agencies Ltd. v. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned on monthly basis by the assessee from the media for releasing advertisements of certain customers during the period from January 2000 to December 2004;" We are also reproducing the said Annexure II mentioned in the Show Cause Notice: "ANNEXURE II" Details of cases where the service provider is receiving a lump sum amount from their client as agency fee every month and 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 @ Cross Commn. @ 15% ST Payable Up to May 03 0 0 0 0 0 0 0 From Jun 03 to Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gave agency commission through trade discount on percentage basis at 15%. The Commissioner has given the following findings. "The contention of the assessee is not legally sustainable in respect of liability 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 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice. At this point let us be very clear on the legal position. The appellant is an advertising agency. The taxable service in respect of advertising agency is defined in Section 65(105)(e) in the following manner "to a client, by an advertising agency in relation to advertisement in any manner" In the present case, a person or an organization who wants to advertise their product approaches an advertising agency. Therefore such a person/organization who wants to avail the services of advertising agency becomes the client of the advertising agency. The advertisement can be done in various ways either through Print Media or through Radio or Television, etc. in order to fulfill the requirements of his client the advertising agency which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 received from the clients of the service provider (the appellants) there is no liability of service tax on these amounts. What is this cash discount? The appellants have stated that some of the publications request for their payments before the advertis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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