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2019 (4) TMI 126 - CESTAT CHENNAISale of Space or Time for Advertisement - appellants were collecting money for flashing advertisements on their websites from various parties and Google Adsense. It appeared that the said amounts collected for flashing such advertisements - demand of service tax - Held that:- Any service provided/to be provided to any person in relation to Sale of Space or Time for Advertisement, etc., would come under the fold of the aforesaid service category. However, on closer analysis, it is evident that the service tax can be levied only in respect of the services provided “in relation to Sale of Space or Time” and not for – “Sale of Space or Time”. This has to be so, since service tax is an indirect tax, leviable only on ‘service’ and not on ‘sale of goods’ - The combined takeaway from the analysis of the above legal provisions will only result in the conclusion that only services provided ‘in relation to’ Sale of Space or Time for Advertisement on the internet attract service tax liability under Section 65(105)(zzzm) ibid. However, the Sale of Space or Time for Advertisement simpliciter, being only a sale of goods, that cannot be brought into the fold of taxability under the above provisions of the Finance Act, 1994. The lower authorities have confirmed the tax liability on this activity of the appellant on the mistaken premise that “any person who provides space in their website for advertisement through internet is squarely covered as providing a taxable service under this category of service” - the lower authorities have been found to be erroneous - demand do not sustain. Support Services of Business of Commerce - demand of service tax - Held that:- As admitted by the appellants themselves in their reply dated 27.07.2009 to the Show Cause Notice dated 01.04.2009, “The website belongs to them (assessee), where various e-transactions are concluded and executed by Mercado. Since the transactions emanate from their website, they are entitled for a margin out of the sale proceeds”. The arrangement of sharing of net margins equally on all executive orders is only a quantification of the charges that would be payable to the appellant by Mercado for each successful transaction. Mercado is only paying the appellant for the support provided by the latter for supporting their business in the cyber world - there is no infirmity in the impugned Orders of the lower authorities which have confirmed/upheld the tax liabilities in respect of these transactions under the category of Support Services of Business or Commerce. Appeal disposed off.
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