TMI Blog2014 (9) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Appellant : Shri. Prasaad Paranjape, Adv. For the Respondent: Shri. D Nagvenkar, Addl. Comm. (AR) JUDGEMENT Per: P.R. Chandrasekharan 1. The appeals are directed against Order-in-Original No. 19/BR-15/ST/Th-I/2009 dated 10/09/2009 24/BR-20 /ST/Th-I/2009 dated 22/09/2009 passed by Commissioner of Central Excise, Thane-I. Vide the impugned orders, the adjudicating authority has confirmed a service tax demand of ₹ 1,84,02,423/- for the period October 2001 to December 2006 and ₹ 10,39,061/- for the period April 2006 to March 2007, respectively against the appellant, M/s. Grey Worldwide (I) Pvt. Ltd. along with interest thereon and also imposing equivalent amount of penalties. Aggrieved of the same, the appellant is before us. 2. The learned Counsel for the appellant submits that they are engaged in rendering Advertising Agency Services to their various clients. As per the request of the clients, they place the advertisements on their behalf in various print media and electronic media. The print/electronic media in which the advertisements have been placed are decided by the clients and the duration and the size of the advertisement to be pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir clients, it cannot be said that the appellant has rendered any service to the print/electronic media. As far as the appellant is concerned, the client is the advertiser. The electronic media has discharged service tax liability under the broadcasting services in respect of the amounts charged for broadcasting the advertisement. The volume discount given to the appellant is only as an incentive and not for any service rendered and therefore, the question of discharge of any service tax on this amount under the category of BAS' would not arise. As regards the write back on which the service tax has been demanded, these write backs are due to the fact that print/electronic media has overlooked short payments which are shown as outstanding in the books of accounts of the appellant. If the short payments are not collected by the media, in their books of accounts, the appellant write backs the amount and the amount is no longer shown as outstanding. However, as and when the amounts are demanded by the media, they have to reimburse the amounts to the media towards short payments made earlier and therefore, this cannot be considered as a consideration for any services rendered. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and would merit service tax levy under BAS. By placing the advertisement of the clients with print/electronic media, the appellant has also promoted the business of the print/electronic media and hence, these incentives and rate difference retained by the appellant should form consideration received for the services rendered. Accordingly, it is his contention that service tax is leviable on these amounts under the category of BAS. In the case of amounts written back in the books of accounts, it is his submission that so long as the amounts are not reimbursed, the amount outstanding to be paid to the media would acquire the character of a consideration for the services rendered and hence they would come within the scope of BAS. The learned AR places reliance on the decision of this Tribunal in the case of CCE, Chandigarh Vs. Reliant Advertising 2013 (31) STR 166 (Tri-Del) 2013-TIOL-1385-CESTAT-DEL . In the said case the respondent/assessee was recovering service tax from its clients and had suppressed the value of advertising services provided by it and deposited only a portion of the amount of service tax. The demand of service tax was confirmed under the category of sales/adve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to fulfill the requirements of his client the advertising agency which is the service provide gets in touch with the appropriate media. In other words as far as the advertising agency is concerned, its client is not the media. In order to provide advertising services the advertising agency charges certain amounts from the clients. Such amounts are liable to service tax. With regard to the relationship between the advertising agency and the media, the advertising agency has to apply to pay amount to the media and not the other way. To put it differently, the media such as broadcasting agency charges the advertising agency for insertion of the advertisement either in Print Media or in Television. In the present case, the media gives a discount of 15% to the advertising agency. If the Tariff rate is ₹ 100/-, it is sufficient the advertising agency pay the media ₹ 85/- along with service tax. The service tax component received from the advertising agency in turn is remitted to the exchequer by the media agency. The appellants have demonstrated that they have not received any amount from the media. They got only a discount from them. Perhaps the word commission is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, this amount cannot be construed as consideration received towards services rendered. Therefore, the confirmation of service tax demand on these amounts, i.e. volume discounts, rate difference and amounts written back cannot be sustained in law and accordingly, we set aside the same. 4.3 As regards the service tax demand on services received from outside India, the appellant has already discharged the service tax liability along with interest for the period on or after 18/04/2006. In the Indian National Shipowners Association case (cited supra), the Hon'ble Bombay High Court held that demand of service tax under Section 66A on the services received from abroad on reverse charge basis would sustain only with effect from 18/04/2006 when Section 66A was inserted in the statute. Inasmuch as the appellant has discharged the service tax liability in this regard for the period on or after 18/04/2006, the demands for the previous period will not sustain. 5. In view of the above discussion, we set aside the impugned orders and allow the appeals with consequential relief, if any, in accordance with the law. (Operative part of the order pronounced in Court) - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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