TMI Blog2001 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... inst this letter was that firstly, it was contradictory to Section 67(d) of the Finance Act, 1994 (hereinafter referred to as "The Act") and secondly, that the letter was providing something more and going beyond the real scope of the Act in defining the "Valuation of taxable services" and was as such, bad in law. It was also tried to be suggested that such a circular could not be issued by the Government, which had the effect of enlarging or changing the scope of the main provisions of the Act like Section 67(d) of the Act and that such power to change or enlarge the scope of any provision of the Act existed only in the Parliament and as such, the letter/circular was ultra vires the powers of the Government. 3. The learned single Judge has dismissed the writ petition on all counts. Hence, the present Appeal. Before we take up the matter for consideration, few facts would be necessary and so also a glimpse of the relevant and connected provisions of the Act. First facts. 4. The petitioner is an Advertising Agency. It provides services connected with the making, preparation, display or exhibition of advertisements in the print media like Newspapers, Magazines, Journals, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarified that in relation to advertising agency, the service tax is to be computed on gross amount charged by the advertising agency from the client for services in relation to advertisements. This would, no doubt, include the gross amount charged by the agency from the client for making or preparing the advertisement material, irrespective of the fact that the advertising agency directly undertakes the making or preparation of advertisements or gets it done through another person. However, the amount paid, excluding their own commission, by the advertising agency for space and time in getting the advertisement published in the print media (i.e. Newspapers, Periodicals, etc.) or the electronic media (Doordarshan, AIR, Private Channels, etc.) will not be includible in the value of service tax for the purpose of levy of service tax. The Commission received by the advertising agency would however, be includible in the value of the taxable service." (emphasis supplied) We have deliberately emphasized some portion in the above paragraph to show that it was precisely that portion which was under challenge before the learned single Judge and is being assailed before us also. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will be therefore, be our first endeavour to see as to whether the said letter/circular could be said to have anything contrary to the provisions of Section 67(d) or to any other provisions of the Act or would have the effect of enlarging the scope of Section 67(d) of the Act. 8. The learned Counsel firstly points out that there is nothing in the language of Section 67(d) of the Act, which require any further explanation. The section itself is self-explanatory. The learned Counsel argues that while providing for the value of taxable services, the section considers that value to be the "gross amount" charged by the appellant advertising agency from its clients for services in relation to the advertisements. The first argument is this that any commission which the advertising agency gets is strictly between the "advertising agency" and the "advertising media" and this contract has got nothing to do with the clients of the advertising agency. The learned Counsel says that Section 67(d) considers only the transaction between the "advertising agency" and "its clients" and, therefore, any transaction in between the advertising agency and the media agency like Newspapers, Doordarsha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is flashed. Therefore, we have no hesitation to hold that any commission earned by the agency even from the advertising media, if it forms a part of the gross amount charged by such agency from the clients in relation to that advertisement, could be included in the value of the taxable service. When we see the impugned circular/letter, it explains precisely this position and nothing more. Therefore, it cannot be said that such a circular/letter has the effect of enlarging the scope of Section 67(d) of the Act, as is argued. We are in agreement with the learned single Judge, who has by making a reference to Section 65(16) of the Act commented upon the "Taxable Service" and has pointed out that the taxable service by an advertising agency is the service provided to its clients in relation to the advertisements in any manner. We have already shown above that even "selecting or locating a particular print media or electronic media" for flashing a particular advertisement would amount to a taxable service" by the advertising agency and any "commission earned" by it on that account even from such print media or electronic media, if it forms a part of the "Gross Amount" charged and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vassing of cargo, container feeder services, including the commission paid to such agent, which is deemed to be the value of the taxable service. The language of the section specifically provides that any commission earned by the agent would also be included in the value of the taxable service. According to the learned Senior Counsel similar is the provision relating to the "Air Travel Agents" also. 11. There can be no dispute that there is such a specific language but, we cannot ignore firstly the total difference in the taxable service as provided by Section 67(a), (h) and (k) on one hand and Sec. 67(d) on the other. The very nature of those services is different and again, where the language of Sec. 67(d) of the Act, itself is clear and beyond any ambiguity so as to include any kind of commission earned by the advertising agency as a part of the gross amount charged by that agency from its clients then, there would be no question of our looking to the other provisions of the same Act for interpretation. We do not think that it would be necessary for us to fall back upon some other provisions of the Act, though of the same Act, where the interpretation of Sec. 67(d) is absolu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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