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TMI Blog2012 (7) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... es only the latter part i.e placing of creating ad in media for display. The activity of placing an ad with media involves obtaining an order from the client for whom the advertisement is being displayed and by placing an order on a print or broadcasting media. The service pertaining to display in print media is not leviable to service tax and no service tax is being paid on the component of media cost mentioned in the bill. The components of media cost mentioned in the bills in such cases is recovered from the client without levy of service tax and passed on to the concerned print media. The estimated charges towards the media cost in such cases are separately shown and record as the whole along with amount of ad agency commission and service tax worked out as levied on that. In respect of broadcasting media, the cost of media is recovered from client with service tax and passed on to the broadcaster and the service tax liability is discharged by the broadcaster. It was alleged by the department that the applicant are not paying service tax to the department i.e the amount of ad agency commission mentioned in the bill raised by the applicant does not reflect the entire income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicants are giving bulk quantity of advertisement to print/broadcast media and on the sale of their space, the incentive has been given to the applicants on the volume. In that case the activity does not amount to business auxiliary service as the applicants are not promoting the business to print/broadcast media. There is no written agreement between the applicant and the print/broadcast media. In that event stay be granted as the applicants are providing service to their client as an advertising agent. To support his contention he placed reliance on Lintas India P. Ltd. vs. CST 2008(10) STR 474(Tri-Del), Euro RSCG Advertising ltd. vs. CCE 2007(7)STR 277(Tri-Bang) and Tata Motors Insurance Service Ltd. vs. CST 2008(9)STR 176(Tri-Bang). 4. On behalf of the Revenue, Shri P.K.Agrawal, Jt. CDR strongly opposed the stay petition. He submitted that the applicant received remuneration in the form of volume discount for promoting the business of media house. This incentive is being retained by the applicant which is nothing but consideration for promoting the business of media house. Therefore, the case law relied upon by the ld. Advocate are not applicable to the facts of this case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provider from his client only is liable to service tax and not amounts received from others. As far as advertising agency is concerned, its client is not the media. Incentive received by the assessee from certain publication after they achieved certain target, incentive given to them is not connected to service rendered to client. Therefore, no service tax is liable to be paid. In the case of Lintas India P. Ltd. also prima facie it was observed that the discount cannot be considered as commission. Further, in the case of Tata Motors Insurance Service Ltd. prima facie it was observed that discount received cannot be considered as commission to attract service tax. Therefore, prima facie we find that the applicant have made out a case for 100% waiver of pre-deposit of the above said demands. Accordingly, we do so and stay recovery of the above said amounts during the pendency of the appeal. The issue of limitation will be dealt with at the time of final hearing. In view of the above observation, stay petition is disposed of. (Pronounced in Court on ....) Sd/-4.10.2011 Ashok Jindal, Member (J) Per: Sahab Singh: I have gone through the proposed order made by the ld. Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insurance companies for promoting their business by way of insuring new vehicle through their company and applicant was paying service tax on this commission. This supports Revenue contention in the present case. Applicant was also receiving commission from Principal supplier based on quantum of offtake. Tribunal took prima facie view that since they are owners of vehicles and sold them on their own right which fact not disputed by Revenue, no pre-deposit was ordered. In case of Lintas India (P) Ltd. (supra) applicant was getting 15% discount from media and discounted amount was charged from their client on which commission ranging from 2.5% to 15% was charged from the client on which service tax was paid. In the present case, volume discount is not passed on to advertiser by appellant. Therefore, facts in these cases are distinguishable from the present case. 7. In view of the above, I am of the view that applicant is not having a prima facie case in their favour and they should deposit 50% of service tax amount as pre-deposit. On deposit of the same, balance amount of service tax imposed and penalty shall remain stayed during the pendency of the appeal. Sahab Singh, Member (T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agency is liable to service tax under business auxiliary service. The hon'ble Member (Judicial) has taken the prima facie view that the transaction is not liable to service tax while the hon'ble Member(Technical) has taken the opposite view. Hence the reference before me. 3. The ld. counsel for the appellant submits that the transaction under consideration is that of an advertising agency and the appellant has discharged service tax liability on the commission received by them from their client. When they receive volume discounts from the media, in some cases they have passed on the discount to their clients and in some cases they have not passed on and this amount is shown in their books of account as income. The discounts received by them is in the nature of a prompt payment discount/volume discount and no service tax is payable on such amounts as they are not acting as commission agents of the media for promoting their business. Their client for the transaction is the advertiser and on the commission received from their client they have discharged the service tax liability. The ld. counsel also relies on the judgment of this Tribunal in the case of P.Gautam & Co. vs. CCE, Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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