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2018 (6) TMI 928 - AT - Service TaxClassification of services - sub-contract - advertising agency service or not - whether the proposed classification under which the tax was sought to be levied is applicable to the activities of the appellant? - Held that - It is seen from the records that the appellant had registered themselves under Service Tax Rules 1994 as provider of sound recording service. However that by itself is not sufficient to operate as a conclusive ground of taxability. Levy under Finance Act 1994 is not on the persona but on the activity; neither registration nor wherewithal for rendering the service can substitute for classifying the activity within the definition of the service. There is no dispute that the appellant produces an entire program which is then submitted to the client for further use. These may well be in the nature of sub-contract by an advertising agency but is yet an independent one. There is no proposal to tax the activity as provision of advertising agency service ; the appellant is not required to choose between alternate classification as that is the responsibility of the tax collector. Fitment within an alternative classification suffices to erase the proposal in the notice but cannot crystallise liability unless the alternative was also proposed in the notice. We are therefore not required to test the activity of the appellant for fitment under a different classification. As the scope of contract the consideration of which is sought to be taxed extends well beyond sound recording in both the directions we are of the opinion that the proposed classification would not be tenable for levy of the tax - appeal allowed.
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