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TMI Blog2006 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... by engaging print media, TV channels and charge the clients without any mark up and pass on the discount given to them by the Broadcasting agency. Suppose the Tariff rate charged by the broadcasting agency is Rs. 100/-, they give 15% discount to the appellants. As a result, they charge only Rs. 85/- along with 10.5% service tax which they have to pay to the Exchequer. The appellants passed on the discount given to them by the broadcasting agency by charging Rs. 85/- plus 10.5% service tax from their clients. Revenue has issued a Show Cause Notice for payment of service tax on the 15% discount given to the appellants by the broadcasting agency. The Jurisdictional Commissioner confirmed a demand of Rs. 55,05,725/- in terms of Section 75(1) of Finance Act 1994. The details of the amount are given in Annexure II of Show Cause Notice. Interest under Section 75 has been demanded. Penalty under Section 76 at the rate of 200/- per day has been imposed. A penalty of Rs. 70 lakhs has been imposed under Section 78 of the Finance Act, 1944 for suppressing the value of the taxable service with an intent to evade payment of service tax. The appellants strongly challenge the findings in the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- per day were demanded under Section 76 of the Finance Act, 1994. A penalty equal to the service tax amount confirmed was imposed under Section 78 of the Finance Act, 1994. The Commissioner (Appeals) in the impugned order upheld the order of the lower authority. Hence the appellants have come before the Tribunal for relief. 6. Shri Raghuraman, learned Advocate appeared for the appellants and Shri R.K. Singla, learned Jt. CDR appeared for the Revenue. 7. The learned Advocate urged the following :- (i) The cash discount and incentives for target achieved have nothing to do with the rendering of services by the appellants to their clients and therefore they are not liable to be included as value of the tax able services. (ii) The cash discount is received when the appellants make prompt payment of bills to the media. It is not for the services rendered to their clients and hence this amount is not liable for service tax. The appellants get 15% commission from the press media when the same is paid within 60 days after the advertisements are released in the newspaper. (iii) The Commission received on services rendered was introduced under the head business auxiliary services wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 310213102 47902215 3832177 From Oct 04 to Dec 04 23303363 44376048 1355000 69034411 81216954 12182543 1242619 Dell Up to May 03 1306447 0 0 1306447 1536996 230549 11527 From Jun 03 to Sep 04 20793437 0 0 20793437 24462867 3669430 293554 From Oct 04 to Dec 04 6491450 0 0 6491450 7637000 1145550 116846 Crane Upto May03 0 0 0 0 0 0 0 From Jun 03 to Sep 04 238743 0 0 238743 280874 42131 3370 From Oct 04 to Dec 04 312800 0 0 312800 368000 55200 5630 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantiate their claim that the service tax amount due on such receipts had been duly paid. There is no evidence regarding payment of Rs. 55.05 lakhs (approx.) towards service tax during the aforesaid period. No evidence has been brought on record by the assessee to the effect that the service tax liability on the lump sum payment received from the clients was discharged by them, in duly prescribed manner. Since Service Tax was legally paid on the said lump sum payment and the assessee received payment from their clients as shown in Annexure II, the amount of Service Tax not deposited/not paid to the Government account, is recoverable from them under the provisions of law." After making above observations, the Commissioner has confirmed the amount invoking extended period. He has also imposed a huge penalty of Rs. 70 lakhs under Section 78 of the Finance Act, 1994. Both the Show Cause Notice and the impugned order show total non-application of mind. The Show Cause Notice has just assumed that the appellant received an amount of Rs. 6,52,27,619/- from the media. There is absolutely no evidence that the appellants had received the above mentioned sum, from anybody. it is not understo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no service tax liability, there is no question of imposing penalty and demanding interest. Hence we set aside the same and allow the appeal with consequential relief. 10. As regards the second appeal, the service tax has been demanded on the amounts received as (i) cash discount (ii) target incentives. The Show Cause Notice dated 17-2-2005 itself makes it clear that these amounts have been received from the media. Since these amounts have not been received from the clients of the service provider (the appellants) there is no liability of service tax on these amounts. What is this cash discount? The appellants have stated that some of the publications request for their payments before the advertisements are released and have agreed discount on these advance payments. These discounts on the bills are received from the publications and not from the clients. Thus cash discount is an income from payment of bills in advance and not from services rendered to clients and does not attract service tax. In addition to this cash discount, the appellants received incentives from certain publications after they reached certain targets of advertising business given to them. This incentive i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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