TMI Blog2019 (8) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... ELD THAT:- The same has been made taxable only with effect from Finance Act, 2006 as indicated in CBEC Circular No.334/4/2006-TRU dated 28.2.2006 - Since the entire demand is for the period prior to March 2006, i.e., before the charging Section was introduced on this count, the same cannot be sustained. Accordingly, the demand on this account also needs to be set aside - Accordingly, demand of service tax on both counts in the impugned order needs to be set aside. Appeal allowed - decided in favor of appellant. - ST/501/2009-DB - Final Order No. 20655/2019 - Dated:- 19-8-2019 - MR. S.S GARG, JUDICIAL MEMBER And MR. P.V. SUBBA RAO, TECHNICAL MEMBER Mr. N. Anand, Advocate For the Appellant Mr. Rama Holla, Superintendent (AR) For the Respondent ORDER Per : P.V. Subba Rao The appellant, M/s. Mudra Communications Pvt. Ltd, has filed this appeal against the impugned Order-in-Appeal No.26/2006-ST dated 27.2.2009. 2. Heard both sides and perused the records. The appellant herein is a private limited company registered with the Service Tax department as a service provider under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee purchased time slots for advertisements in the electronic media from film/ serial producers and sold it to advertisers. The appellant purchased time-slots for advertisement in electronic media from either telecaster or broadcasting company or from film producers or serial producers. When the time-slot (FCT) was purchased from telecasting and broadcasting company, they raise invoices and also charge and pay service tax. When time-slot was purchased from film producers or serial producers, no service tax is either charged or paid by the appellant. The show-cause notice proposed to demand service tax on purchase of time-slot (FCT) from film / serial producers. The appellant contested the demands on merit as well as on plea of limitation. Not agreeing with the appellant s contentions, the adjudicating authority confirmed the appeals. On challenge, the first appellate authority upheld the orders of the adjudicating authority. Hence, this appeal. 5. Learned counsel for the appellant submits that as far as the first issue of discount given by media to them for advertisement is concerned, he would submit that they have been discharging service tax on the gross amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of procurement of Free Commercial Time (FCT), which is sold by them to advertising agencies for showing advertisements. 2. It appears that in some jurisdiction service tax is being demanded on the services listed at ( I ) under the category of Videotape Production Services, and in respect of services listed at ( ii ) under the category of Advertisement Agency Services. 3. The issue has been examined. The taxable service i.e. video tape production service is on the process of recording of any programme, event or function on magnetic tapes (including editing thereof). The tax is therefore limited to the technical function of recording or editing what is recorded and not on the entire gamut of production of serials. In case the producer hires a video-grapher or an editor, the payment made for services would be taxable at the hands of such service providers. However, no tax is leviable on the producers for selling the serial to channel. 4. Similarly, in case of FCT, selling the time allotted to a producer does not fall within the purview of advertisement service since this activity is not connected to making, preparation, display or exhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isers. 9. In view of the above, he would submit that the entire demand needs to be set aside along with interest. Consequently, the penalties also need to be set aside. 10. Per contra, the learned Departmental Representative submits that with regard to the commission earned by the advertising agency from the agency media that the Hon ble High Court of Madras in the case of Adwise Advertising Pvt. Ltd. vs. UOI: 2001 (131) ELT 529 (Mad.) has categorically held that the amount which the advertising agency receives from the client is chargeable to service tax including any commission / discounts which they receive from the advertising media. He also relies on the Board Circular No.341/43/96-TRU dated 31.10.1996 to assert that the commission received by the advertising agency would be includable in the value of taxable services. 11. In view of the above, learned Departmental Representative urge that the impugned order is correct and calls for no interference. 12. Countering the argument, learned counsel for the appellant would submit that they are full in compliance with the judgment of the Hon ble High Court of Madras in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d service tax on the entire amount of discount retained by them. In other cases, they have retained only part of the discount given to them by the media and passed on the rest to their client-advertisers; in such cases, they have billed them for a lower amount and they have also discharged service tax on whatever amount which they have retained towards their services. 15. In view of the above, in this case, we find that the service tax has been discharged on the entire amount received by the appellant from their client-advertisers for the services rendered by them. This is in compliance with the judgment of the Hon ble High Court of Madras in the case of Adwise Advertising Pvt. Ltd. (supra) inasmuch as they have discharged service tax on the entire consideration which they received for their services. In view of the above, the demand raised in show-cause notice, confirmed in the Order-in-Original and upheld in the impugned order on the amount which they have not received as consideration i.e., the amount which they got as discount and passed on their client advertisers, is not chargeable to service tax as the same is not charged for their services. The demand on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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