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TMI Blog2012 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... n of certain Built, Operate, Own and Transfer (BOOT) projects. 4. In return, the said parties were granted permission to put up specified number of sky-signs, unipoles, kiosks, lollipops etc. at different parts of Jalandhar-Kaparthala railway over bridge and also rent certain shops under the said railway over bridge constructed during the period 1.04.06 to 31.03.09. Such places given to the parties under the contract were being used by them for putting advertisements or further allotting the same to the advertisers. 5. The lower authority has confirmed service tax demand against the appellant on the ground that the above activities resulted in providing services falling under the category of Sale of Space and Time for advertisement services . By referring the to the definition of Sale of Space or Time for advertisement services as appearing u/s 65(105)(zzzm) of the Finance Act, 1994, Commissioner has held that the agreement entered into by the appellants with companies for display of advertisements in the jurisdiction of Municipal Corporation, Jalandhar amounts to rendering of the said services, which are liable to be taxed. 6. Ld. Advocate appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he railway line or bridges etc. with their own finances and by selling the sides of the bridge, would have collected that amount from the other parties, the said activity would have prima-facie amounted to providing sale of space or time for advertisements. In the present case, M/s Shri Durga Publicity Service has given the entire finances before hand to the Municipal Corporation for construction of the bridge and in turn has earned their right to space to be provided by the Municipal Corporation for putting up various advertisements etc. The appellants plea that the said money was realized as advertisement tax which is a sovereignty/State function, cannot be appreciated at this stage as rightly observed by the Commissioner that an amount of Rs. 11 crores cannot be said to be advertisement tax. Further, he has also referred to the agreement specifically stating that the noticee will not charge any advertisement tax, Tehbazari or any tax for the whole contract period. He has accordingly observed that this reflects that advertisement tax has to be over and above the amount charged by the noticee from its client. He has also observed that for collecting advertisement tax, there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y line and in lieu of this, M/s Shri Durga Publicity were given sole right at 199 spots within the jurisdiction of Municipal Corporation of Jalandhar, including spots on the flyover, for putting up unipoles, kiosks, skysigns, lollipops etc for advertisement. There were similar agreement with other parties. The unipoles, kiosks, skysigns, lollipops etc erected by M/s Shri Durga Publicity and others at the spots permitted by the Appellant were used for advertisement or for sale of advertising space on them to others. The Appellant in terms of their resolutions approved by the Government of Punjab, Department of Local Government, charged advertisement tax on the revenue earned by various parties including M/s Shri Durga Publicity from the advertising space on the unipoles, kiosks, skysigns, lollipops etc. erected by them. The department is of the view that the Appellant by permitting the use of various spots by various parties for putting up unipoles, kiosks, skysigns, lollipops etc for advertisement have provided the service in relation to sale of advertising space or time taxable under Section 65(105(zzzm) of the Finance Act, 1994 and treating the advertisement tax charged by the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sovereign and statutory function, cannot be treated as amount received for service in relation to sale of advertising space; that no taxable service has been provided by the Appellant; that the actual providers of taxable service of sale of advertising space are M/s Shri Durga Publicity and others who have put up unipoles, kiosks, skysigns, lollipops etc. and had sold the advertising space on them, that granting of permission by the Appellant to various parties for putting up unipoles, kiosks, skysigns, lollipops etc. for advertisement cannot be treated as service in relation to sale of space for advertisement; that the unipoles, kiosks, skysigns, lollipops etc. erected by M/s Shri Durga Publicity and other to whom the permission in this regard has been granted by the Appellant, are owned by them not by the Appellant and, hence, there is no question of the Appellant having sold the advertising space on such unipoles, kiosks, skysigns, lollipops etc; that the department s case against the Appellant is without any basis; that the Appellant have a strong prima-facie case and, hence, the requirement of pre-deposit of service tax demands, interest and penalty may be waived for heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his land or a corner of the terrace of his house for the purpose of advertisement cannot be said to be an activity in relation to sale of advertising space, as that person is in no way involved in sale of advertising space. The person who permits the use of his land or other immovable property for fixing poles/ structures for putting up bill boards for advertisement or a municipal corporation permitting fixation of kiosks for advertisement on street light poles are neither selling any space for advertisement nor are providing any service in relation to sale of space for advertisement. They have only permitted the use of their property, and such transactions cannot be treated as of service in relation to sale of time or space for advertisement. It is M/s Shri Durga Publicity and others who have created the advertising space available for their use for advertising or for sale to other advertisers by putting up unipoles, kiosks, skysigns, lollipops etc at spots permitted by the Appellant and, therefore, the Appellant cannot be treated as having sold the advertising space or having provided service in relation to sale of advertising space. The Commissioner has simply given a finding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant s resolution ratified by Government of Punjab, be prima-facie called consideration for the service in relation to sale of advertising space alleged to have been provided by them? iii) Is the Department s case against the Appellant without any basis and hence the requirement of pre-deposit under Section 35F of Central Excise Act, 1944, as made applicable to service tax matter by Section 83 of the Finance Act, 1994 must be waived or the Department has a prima-facie case and pre-deposit as proposed by the learned Member (Judicial) must be ordered for hearing of the appeal? 19. I have gone through the decision recorded by both the Members, the case records and considered the arguments during the hearing before me. 20. The facts of the case are recorded by both the Members. I am only restating it from my perspective. The Municipal Corporation Jalandhar wanted to build a rail over bridge over Jalandhar-Kapurthala Railway line near DAV College. M/s. Shri Durga Publicity Services ("SDPS" for short) agreed to pay Rs. 18 crores in different installments for building the bridge and SDPS in turn was given the right to construct and own for a period of 11 years a spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernet; (ii) ----" 24. The dispute is whether the money collected by the Corporation can be considered to be value for sale of space for displaying advertisement or is to be considered as tax for putting up advertisement. Member (Judicial) prima facie considers that the money paid by SDPS is consideration for sale of space for advertisement. Member (Technical) prima facie considers that the corporation by permitting fixation of advertising boards are neither selling any space for advertisement nor providing any space in relation to sale of space for advertisement. The Corporation is only permitting use of their property and such transactions cannot be treated as of service in relation to sale of time or space for advertisement. In his view it is SDPS who has rented out space for putting up advertisements. 25. During the hearing the Counsel for appellants brings to my notice a decision by Gujarat High Court in the matter of Selvel Media Services Pvt. Ltd. v. Municipal Corporation of City of Ahmedabad - [2010] 30 VST 653 Gujarat High Court. In this case the Corporation was seeking to charge service tax on amounts collected by them for licence fees for the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner is rendering any service to its client so as to be treated as a taxable service under the provisions of the Service Tax Act." 26. It can be seen that the facts of that case are very different from the present case since in that case the property on which advertisement was being displayed belonged to private parties and not the Corporation. The fee was charged for just giving the permission. In the case before me the property belongs to the Corporation. 27. The Counsel points out that the bridge was built on a Built, Own Operate, Transfer (BOOT) scheme. SDPS had a right to own the advertising space, constructed by them for a period of 11 years and therefore there was no sale of the space by the Corporation to SDPS and therefore the consideration received is towards taxes for permitting display of advertisements. 28. What I find is that though the agreement is called a BOOT Scheme it is not a conventional BOOT scheme. SDPS did not build the bridge, it only financed the construction of the bridge though it constructed the advertising boards in question. Neither do SDPS own or operate the bridge, though SDPS owns and operates the advertising boards. The agreement does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following :- (a) All unipoles will be fixed within the green belts and another approved space. (b) Where green belt area is not available and the site is otherwise suitable for fixing of unipoles, the site will be got visited and approved by an officer/committee of officers of Municipal Corporation deputed/constituted for this purpose. The work will be started only after a written approval from the said officers/committee. (c) Wherever unipoles have been fixed in contravention of above two clauses, these will be shifted as per clause No. (a) and (b) above. (d) The vertical clearance of each unipole will be not less than 8 feet height, so that : (i) No inconvenience is caused to the passersby. (ii) Greening/landscaping if any, remains visible to the people. (e) In case, there is any objection from the Institutions/owners of houses regarding the site or continuity of unipoles in a row, the same shall be given due consideration and will be resolved in consultation with the help of senior officers of the Municipal Corporation. (f) In order to ensure least obstruction to the moving traffic, the unipole or its frame should not have its projection beyond a point w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference in time of payment of tax and the quantum of tax depending on whether the tax rate changes in between. But I keep this fact in view while agreeing prima facie with the view that it is SDPS which is selling space for advertisement. Though the other parties who were permitted to put up space on the land of Municipal Corporation are on slightly different footing, I do not find it necessary to examine that matter in great detail this sage. I see that the Members of the Bench which heard the matter also has not found it necessary to examine that issue in detail at this stage. 35. So at this stage I am of the view that it will be appropriate to admit and hear the appeal without any pre-deposit of dues arising from the impugned order. 36. For the above reasons the questions referred to me is answered as under : S. No. Question Answer 1 Is the activity of the appellant, in the background of the facts of this case, prima facie covered by Section 65(105)(zzzm) of the Finance Act, 1994 for being subjected to service tax as service in relation to sale of time or space for advertisement? No 2 Can the advertisement tax collected by the appellant from M/s. Shri Durga Publicit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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