TMI Blog2013 (3) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... is effect. “Sale of space or time for Advertisement Services” was brought into the Service tax net w.e.f. 1-5-2006 only. The disputed period in the instant case is prior to that. Thus, the activity of the appellant during the disputed period is not taxable under Advertising Agency Service and Sale of Space or time for Advertisement Services too. - Demand set aside - decided in favor of assessee. - 192/2011 (M-ST) - - - Dated:- 25-10-2011 - Shri P. Ayyam Perumal, J. Shri T. Vasudevan, Advocate, for the Assessee. None, for the Department. ORDER This is an appeal filed by M/s. Sovereign Media Marketing (P) Ltd., Chennai (hereinafter called as the appellant) against the lower adjudicating authority s impugned Order-in-Origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income under the head Retainer Fees received in the P L account of the appellant for the years ending 31-3-2004 and 31-3-2005. The appellant had neither taken registration nor paid service tax on the above services rendered. The fact of having provided such taxable service came to light only through audit of accounts of Malar Publications. Hence, a Show Cause Notice proposing (i) to classify the activity of canvassing for advertisements in the publications by the appellant as taxable service under Business Auxiliary Service , (ii) to demand an amount of Rs. 22,55,400/- towards service Tax and Rs. 18,900/- towards Education Cess on the value of services rendered during the period from 1-7-2003 to 31-3-2005 under proviso to Section 73(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant called space selling was outside the purview of service tax. (iii) that the appellant was paid retainership for its activities and not on commission basis and hence the levy of service tax was unjustifiable. (iv) that in terms of Circular No. 64/13/2003-S.T., dated 28-10-2003, the activity of space selling i.e. contacting potential advertisers and persuading them to give advertisements would not fall within the definition of advertising agency and was not subjected to service tax and hence application of Section 73(1) does not arise at all. (v) that the activity of canvassing for advertisements also called space selling was included as a taxable service under Section 65(105)(zzzm) w.e.f. 1-5-2006 and hence was not ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant towards canvassing for advertisements in the publications under the category Business Auxiliary Service for the period 1-7-2003 to 31-3-2005. The appellant had contended that their activity is just space selling in print media which will fall under advertising agency services and that the activity was out of purview of service tax during the disputed period. Hence, the Short issue to be decided in the instant case is whether the activity of canvassing for advertisements in publications is taxable under Business Auxiliary Service as alleged by the Department or not. 5.1 I find from the records that the Department classified the appellant s activity of canvassing for advertisements in the publications as Promotion or mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in canvassing for advertisements for which they get commission from the publishers. The persons involved do not provide any service like making, preparing, displaying and exhibiting and only undertake canvassing for the advertising. 2. The term canvassing may merely invoice contacting potential advertisers and persuading them to give advertisement to a particular newspaper/periodical/magazine. The making and preparation of the advertisement namely, drafting of the text, preparation of layout is left either to the advertiser or to newspaper/periodical/magazine. Such a service is known as space selling . In such cases, since the agency undertakes the job of merely bringing the order for an advertisement and does not undertake any furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis. Board vide last para of the above circular had clarified that when their services of canvassing is limited to space selling then such services would not be liable to any Service tax. In the instant case the appellant is not rendering such service on commission basis. The amount paid by the publications is a fixed retainer fee on monthly basis. Thus by the above Circular, the appellant s activity is not taxable under Advertising Agency during the disputed period. The Government intends to exclude print media from the purview of Service tax. In case of advertising services also, the circulars clarifying that the sale of space for advertising would not be taxable under the category of advertising services were primarily meant to save the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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