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TMI Blog2008 (1) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... dition to displaying advertisements, the appellants also leased out hoardings to its associates who undertook the activity of displaying advertisements. The demand has been raised on the appellant for leasing out hoardings; for service tax on the leased amounts collected. The appeal has been filed with a delay of 9 days. The delay has been explained as caused by the demise of the mother of the accountant of the appellant in charge of excise matters. After hearing both sides, the requirement of predeposit is waived and the delay in filing the appeal is condoned. The appeal is taken up for disposal. 2. The appellant is engaged in displaying advertisements. It also provides on lease hoardings to its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , an advertising agency, which in turn billed the clients, then the advertising agency/intermediary was the service provider who was liable to pay tax. It is argued that in view of the above clarification, the original authority could not have demanded the impugned tax on charges for leasing out hoardings to an advertisement agency. Moreover, the department was bound by its own clarification. The original authority had rejected their argument on the plea that "a simple letter issued from the department cannot override the statutory provisions" and hence the assessee was liable to pay tax on the taxable value received from clients/advertising agency. In the impugned order, the Commissioner (Appeals) held that the clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion issued by the Commissioner. 6. The learned SDR has no objection to the matter being remanded to give an opportunity to the appellants to establish that the tax due had already been received by the department. 7. I have carefully considered the facts of the case and the submissions made by both sides. The following is an extract from the letter issued by the Commissioner to the Tamil Nadu Outdoor Advertising Association of which appellant is a member :- "The terms 'advertisement', taxable service', and 'advertising agency', are defined in Sec.65 of Finance Act 1994. * "taxable service" means any service provided to a client, by an advertising agency in relation to advertisement, in any manner; * "advertisement" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghlghts as in original) 7.1 There cannot be any dispute that the appellant is covered by the statutory definition of "advertising agency", being a commercial concern engaged in providing service connected with the making, preparation, display, or exhibition of advertisement. As per the clarification, when a hoarding company like the appellant billed an intermediary i.e., an advertising agency which in turn billed its clients, then the advertising agency/intermediary is a service provider who is liable to pay tax. As the liability of the hoarding company is passed on to the ultimate advertising agency, the department had clarified that the hoarding company should ensure that the person, to whom the board (hoarding) is let out, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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