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TMI Blog2019 (8) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... discount is either deducted from the gross amount or the invoiced amount could be net of the discounted amount. For example, if Rs. 100/- is the total bill either the invoice by the media on the appellant could be for Rs. 100/- minus discount of Rs. 15/- or the invoice could be for Rs. 85 itself. On the amount which the media is actually receiving i.e., Rs. 85/- in this example, the media agency is discharging service tax. The appellant would, in turn, raise a bill on the clients for the amount charged by the media plus their commission/discount. In some cases, they may, in fact, pass on part of the commission to their clients. In the above example, either the appellant invoices their clients for Rs. 100 or any amount between Rs. 85/- and Rs. 100/-. The appellant has been discharging service tax on the amount which they are actually charging for their services to their clients. It could be Rs. 15/- in the above example or less if some discount is passed on to the customers. 3. The allegation in the show-cause notice is that while conducting audit of accounts of the assesse, it was noticed that the assessee has not paid service tax on the full amount of commission earned by them f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, they are discharging the service tax on the entire amount which they receive as commission for their services. These facts are evident from the show-cause notice itself. 6. Secondly, he would further argue that discounts and incentives received by an advertising agency from print media are not charges received for services and cannot be charged to service tax either under Business Auxiliary Services or under Advertisement Services as has been held by the Tribunal in the following cases: (i) McCann Erickson (India) Pvt. Ltd. vs. CST: 2008 (10) STR 365 (Tri.-Del.) (ii) Euro RSCG Advertising Co.: 2007 (7) STR 277 (Tri.-Bang.) (iii) Grey Worldwide Pvt. Ltd.: 2015 (37) STR 597 (Tri.-Mum.) 7. As far as the second issue of tax on time-slots (FCT) which have been bought directly from film producers/serial producers for advertisement is concerned, he would submit that it has been clarified by the CBEC vide Circular No.78/08/2004-ST dated 23.3.2004 as follows: Service tax on selling Television serial episodes to TV Channels and Free Commercial Time to advertising agencies, not leviable Circular No. 78/08/2004-S.T., dated 23-3-2004 F.No. 241/01/2004-CX.4 Government of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made vide Clause 68 of the Finance Bill, 2006 and through notification Nos. 1 to 7/2006- Service Tax, all dated 1st March, 2006. Details of the changes are explained in the Explanatory Notes. For complete details, clause 68 of the Finance Bill, 2006, notifications and Explanatory Notes may be referred to. Salient features of the changes are discussed hereinafter : ...... 3.9 Sale of Advertising Space or Time : Sale of media in television and radio by a broadcasting agency or organization is taxable under Section 65(105)(zk). Services provided by advertising agencies are taxable under Section 65(105)(e). This entry proposes to levy service tax on sale of time or space for advertisement, excluding sale of space for advertisement in print media. Sale of advertising time in television and radio by any person other than broadcasting agency or organization is also covered under this sub-clause. Some of the other modes of advertisement covered under this mode are internet advertisement, advertisement on buildings, vehicles, etc., advertisement in motion pictures, television serials, video and music albums, mobile phones, ATMs, films and television serials (known as product pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y have passed on to the clients and which they have not collected at all. Since this does not form part of the gross amount charged, the question of liability of service tax on this amount does not arise. 13. We have considered the arguments on both sides and perused the records. The issues to be settled by us are: (i) Whether the discount given by the media who sold space in print media to the appellant for advertisement and which they pass on to their client advertisers, is liable for payment of service tax under the category of 'advertisement services'. (ii) When the appellants have purchased time-slots (FCT) from film producers and serial producers for advertisement in electronic media, whether they are liable for payment of service tax under the category of advertising agency during the period prior to Finance Act, 2006. (iii) Whether the demands are liable to be confirmed in view of the above, along with interest. (iv) Whether the penalties under Sections 76, 77 and 78 of the Finance Act, 1994 can be imposed upon them. 14. As far as the first issue of discount given by the print media is concerned, the learned counsel for the appellant submits that they have retaine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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