TMI Blog2021 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... making of advertisement or preparation of advertisement. The appellant s activity is covered under the display of the advertisement through various modes such as hoardings, display board, kiosk, etc. this can be further get cleared from the invoices of the service raised by the appellant. The appellant is charging fixed amount on monthly basis towards display charges and the description provided in the invoice is media space. In the invoice there is no charges for the services such as making of advertisement or preparation of advertisement example for visualizing, conceptualizing, designing, etc. of the advertisement therefore, it is clear that the invoices raised by the appellant is not for making or preparation of advertisement but only for the display charges for the space used for display of such advertisement. The appellant has submitted that the printed material/flex is provided by the client therefore, there is no question of including the cost thereof in the media space invoice of the appellant. The appellant s service is confined to display of advertisement on the hoardings, boards, kiosk, etc. and charge for the same is as per the space provided - As per the advertisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant only for displaying on their hoardings. Therefore, firstly the statements particularly in the nature of the present case is not very relevant, secondly the same cannot be relied upon as the same has not passed the test of examination as mandatorily required under section 9D of the Central Excise Act, 1994 which is applicable in the case of Service Tax as per Section 83 of the Finance Act, 1994. The appellant has provided service of sale of space for advertisement on their hoardings/bill boards, kiosk, etc. and it is clearly covered under Negative List during the period 01.07.2012 to 30.9.2014, accordingly demand for this period is set aside. Demand for the period 01.10.2014 to March, 2016 - HELD THAT:- The appellant has repeatedly submitted that from 01.10.2014 they have been paying Service tax regularly and there is no short payment of Service Tax rather there may be excess payment. It is observed that from the submission made by the appellant before the learned adjudicating authority and the finding in the impugned order that some service of sale of space was provided during the period 01.07.2012 to 30.09.2014 but the invoices were raised on or after 01.10.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant is not merely selling/renting of bare spaces to their clients but providing additional services to its customers for displaying their advertisements on the hoardings and kiosks and therefore, liable to service tax. Investigation also recorded statements from the partner of the appellant Shri Yashwant Shah and contended that as per the statement and the statements taken from four customers, it reveals that the appellant is engaged in providing the Advertising Services to their clients which is liable for Service Tax and does not fall under the Negative list. After detail investigation a Show Cause Notice dated 13.06.2017 was issued invoking extended period. After considering the detailed reply submitted by the appellant and providing Personal Hearing, the adjudicating authority passed the impugned order confirming the charges and allegation levelled in the Show Cause Notice and demand of Service Tax, Interest and Penalty as proposed in the Show Cause Notice was confirmed. Therefore, the present appeal filed by the appellant. 2. Shri Hardik Modh, Learned counsel appearing on behalf of the appellant filed a detailed written submission on 26th December, 2020 which is ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd oF the agreed term, either the contract is renewed or it gets expired. In case of renewal of contract no further activity is carried out by the appellant except considering the element of discount or price reduction, if any, demanded by the customers. However, in case of expiry of contract the advertisement material i.e. Flex banners of the clients are removed and printing material containing contact details of the appellant are again mounted on the hoarding/bill board/kiosk, etc. at the cost of the appellant so as to make the media space available for new client. 2.2 As regard legal provision he submits that the service of sale of space for advertisement other than advertisement by radio or televisions are taxable prior to 1st July, 2012. With the introduction of negative list of services with effect from 1st July, 2012, the above referred services were covered under the negative list as per the clause (g) of Section 66D of the Finance Act, 1994. From 1st October, 2014 the said services were again brought into tax net vide Finance (No.2) Act, 2014. The appellant regularly paid service tax on the said services prior to 01.07.2012 and post 30.09.2014 and no Service Tax was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submits that partner of the appellant Shri Yashwant Shah explained about the procedure/practice of the appellant for obtaining work order related to preparation and displaying of advertising materials and hoardings. He specifically mentioned that the appellant arranged/managed to display advertisements of their clients on the hoardings for the specific period and charge for the service rendered by them. Advertising agencies provides printed vinyl or flex which was mounted on hoardings by themselves or through the sub-contractors namely Aagam Publicity. He further states that in a case where advertising agency wanted the services or printing of the material of their clients, they have suggested the name of M/s. Milan Publicity who did their work of printing their material on vinyl/flex. The appellant paid Service Tax on such transaction where they designed and printed advertisement material and mounted on hoardings for which composite amount has been charged. Therefore, the amount which is in dispute is related to providing space for advertisement and not for making or preparation or conceptualization or visualization of advertisement. He relied upon the following judgments where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trification of hoardings, etc. are ancillary to main service for which no separate consideration was charged by the appellant. Therefore, as per section 66F (3) which provides taxability of bundled services, the bundled services provided by the appellant would fall under Negative list. In support of his submission he referred the Taxation of Services : An Education Guide dated 20th June, 2012 issued by Central Board of Excise and Customs according to which large number of service receivers of such bundle of services reasonably expect service to be provided as a package then such a package could be treated as naturally bundled in the ordinary course of business and if the nature of service in such bundled services that one of the service is the main service and the other service combined with service are in the nature of incidental or ancillary service which help in better enjoyment of main service then the classification of service will be under the main service. In the present case, the appellant s main service is display of advertisement of their client and mounting, electrification and repair and maintenance of their hoarding is ancillary therefore, the correct classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esigned, conceptualized the advertisement material. He in his letter dated 4th September, 2016 stated that they ordered the appellant for displaying the advertisements on hoardings. The appellant in turn managed all work to mounting of the printed advertisement materials on the hoardings. A brief note to the letter clearly states that art work and creating work has been supplied by the client to the appellant. It reveals that the appellant did not provide all these services. He submits that Shri K.N. Prakash Shetty, Finance Controller Authorized signatory of M/s. Kinetic Advertising India Pvt. Ltd. Which is an advertising agency in his statement dated 16th September, 2016 deposed that in most of the cases the main client (the company) provided the printed vinyl/flex and in other case they provided the design and in that case the advertising agency themselves arranged to print the advertisement on vinyl/ flex board. Work related to preparation/fabrication of hoardings structures and mounting of the printed materials on the hoardings was carried out by the appellant. Shri K.N. Prakash Shetty further stated that they have contracted with the appellant for specific space for hoarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 9D of the Central Excise Act provides that statement of any witness will not be considered as an evidence only if such person who made the statement has been examined as a witness by Central Excise Officer and thereafter having regard to the circumstances of the case decides whether it is appropriate to consider the statements of witness as an evidence. Therefore, it is an obligation upon the respondent to examine four customers before placing reliance upon their depositions. He placed reliance on the following judgments:- ARYA FIBRES PVT. LTD. Vs. C.C.EX. 2014 (311) ELT 529 (T), Telestar Travels Pvt. Ltd. Vs. Special Directorate of Enforcement, 2013 (289) ELT 3 (SC). 4.2 On the issue of larger period of limitation, he submits that the same is not invocable as there was no deliberate intention on the part of the appellant to either not to disclose the correct information or to evade the payment of any tax. There was no positive act on the part of the appellant to evade the payment of any Service Tax. The appellant was under bona fide belief that no Service Tax is payable on the transaction in dispute. The appellant has not suppressed any information from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was not granted to the appellant. It ought to be considered that Section 67 of the Act provides that the gross amount charged for the Services is inclusive of the Service Tax payable in a case when no tax has been separately collected on service and taxes be demanded subsequently. Therefore, the money recovered from the service receiver would have to be considered as cum tax price. He placed reliance on the following judgments:- a. SRI CHAKR TYRES Vs. CCE (MADRAS)- 1999 (108) ELT 361. b. ROHIT DETECTIE SECURITY AGENCY Vs. C.C.Ex.- 2009 (14) STR 689 (T) c. GEM STAR ENTERPRISES (P) LTD. VS. CCE, 2007 (7) STR 342; 4.6 Shri Hardik Modh, concluding his argument prays that in view of the submission made herein above the impugned order is not sustainable and the same may be set aside and appeal be allowed. 5. On the other hand, Shri Ghanshyam Soni, Learned Joint Commissioner (Authorized Representative) appearing on behalf of the revenue reiterates the impugned order. He has also submitted the written submission dated 16.12.2020 wherein, he pointed out the important paragraph from the impugned order. He submits that the appellant is providing advertising agency serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sk where the flex banners of printing banners were included in the consideration. In the second category the appellant have admittedly discharged the service tax and on first category the appellant s contention is that the service is of the sale of space for advertisement therefore, the same falls under Negative List of Services under Section 66D of the Finance Act, 1994 with effect from 1st July, 2012. Negative list was introduced wherein, as per clause (g) of Section 66D of the Finance Act, 1994 selling of space or time slots for advertisements other than advertisements broadcast by radio or television was put in negative list. However, post 01.10.2014 the said entry in the negative list was amended and described as selling of space for advertisement in print media . The advertising agency was defined under Section 65 (3) as follows:- Advertising agency means any person engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant 6.2 In view of the above definition the following services falls under the category of advertising agency. I) Making of advertisement II) Prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the negative list under Section 66D (g) will become redundant. The appellant can be charged service tax only in case where they themselves developed printed vinyl/flex and display the same on their hoardings, board, kiosk, etc. 6.8 Whereas, as per the facts available on record the concept of visualization, conceptualization, preparation of advertisement were done by some other persons and the appellant only provided the space for displaying such advertise therefore, the appellant s activity is clearly limited to Selling of space or time slots for advertisements other than advertisements broadcast by radio or television . As per the facts, we find that in the present case Customers who intend to advertise their product/service do approach to the advertising agency to advertise their product by providing duration and the time during which their advertisement should be displayed. If the advertising agency designs, visualizes, of conceptualizes advertisement to be displayed or exhibited then he will be covered under the scope of taxable service. If a person is provided printed materials for displaying it at a particular location for particular time then such services would fall u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwant C. Shah, Partner of the appellant has categorically stated that the advertising agencies approach them to display advertisement of their client. Advertising agency provides printed Vinyl or Flex which was mounted on the hoardings. With this statement it is clear that the appellant are not engaged in creating, making or preparation of advertising material, they only mount the already prepared advertisement on the hoardings and charge for same on monthly basis. 6.10 A similar issue has come up in various case laws. In the case of Team UPD Ltd.-2006 (3) STR 427 (Tri.Chennai) it was held that appellant allowed their site to be used for display of advertisement of other party against payment of rental charges. Appellants have not conceptualized, visualized and designed such advertisement not covered under the definition of advertising agency hence, no service tax leviable. The fact of the present case is identical to the facts of the aforesaid judgments therefore, displaying the advertisement of other party alone cannot be taxed under the head of Advertising Agency Service. 6.11 In the case of REX ADVERTISERS Vs. COMMISSIONER OF SERVICE TAX-2006 (2) STR 330 (Tri.-Bangalor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... splaying on their hoardings. Therefore, firstly the statements particularly in the nature of the present case is not very relevant, secondly the same cannot be relied upon as the same has not passed the test of examination as mandatorily required under section 9D of the Central Excise Act, 1994 which is applicable in the case of Service Tax as per Section 83 of the Finance Act, 1994. 6.16 This issue of cross examination has been considered in various judgments. In the case of BASUDEV GARG V. CC, NEW DELHI-2013 294 ELT 353 (DEL), the Hon ble Delhi High Court held that the statements against assessee cannot be used without giving them opportunity of cross examining the deponent. It was further held that cross examination is valuable right of accused/ noticee in quasi judicial proceedings which can have adverse consequences for them. The noticee would have right to cross examine in terms of Section 9D. In another case the Hon ble Delhi High Court in the case of J K CIGARETTES LTD VS. CCE, 2011 (242) ELT 189, held that right to cross examination is quasi judicial proceedings can be taken away in certain exceptional circumstances under Section 9D of the Central Excise Act, 1994 by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of other ancillary services. Accordingly, the service will be pre-dominantly sale of space for advertisement. The issue of bundled service has been considered by Allahabad Bench of this tribunal in the case of SJP INFRACON LTD.- 2018 (12) TMI 253- CESTAT Allahabad wherein, it was held as under:- Valuation-bundled service-construction of residential complex service-inclusion of charges on account of External Development Charges, Club Building Charges, Fire Fighting Charges, Electrification Fitting Charges, Park Facing Preferential Location Charges, Electrical Sub Station Charges and such other charges in assessable value- bundling of services- Held that-provisions under sub Section (3) of Section 66F has provided that whenever in ordinary course of business some service is naturally associatged with a single service which gives essential character to the entire package of service then such naturally associated service is treated as bundled service and the said bundled service is to be treated as single service which gives the entire package its essential character. In the present case construction of residential complex service is the service which gives essential charac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 and even if invoices were raised subsequently, the said service will remain non taxable being listed in the negative list. On this issue our view is supported by the following judgments:- 1. RELIANCE INDUSTRIES,- 2008 (10) STR 243 (Tri.Ahd.) which is upheld by the Hon ble Gujarat High Court recorded in 2010 (90) STR 807 (Guj.) 2. Consultant Engineering Service India Pvt. Ltd.- 2013 (30) STR 586 (Del.) 13. Having held above we find that since the adjudicating authority has not properly seen the correct calculation. In view of the above observation the adjudicating authority has liberty to verify the calculation for the period 01.10.201 to March, 2016 and communicate if there is any demand payable by the appellant and in case of excess payment, the appellant shall be entitled for refund in accordance of law. 14. The appellant also made their submission that the extended period of demand is not sustainable. In this regard we find that the appellant have been paying Service Tax on the service in question prior to 01.07.2012 and after 01.10.2014. They were under the bona fide belief that the service of sale of space for advertisement is covered under Negative List for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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