2005 (3) TMI 572 - AT - Service Tax

Summary

Issues: Stay of recovery of service tax amount; Calculation of service tax on advertisement commission.

Analysis:
The appellants sought a stay on the recovery of Rs. 24,337, claiming that the service tax was incorrectly calculated by the lower authorities. They receive a 15% commission on advertisements placed in newspapers or periodicals and have paid service tax on this commission amount. However, the department argues that service tax should be levied on the full value of the advertisements. The appellant's representative produced a circular from the Advertising Agencies Association of India, stating that service tax at 5% is applicable only on the agency commission component of the bill, excluding 85% of the total bill amount. They contend that they have correctly paid service tax at 5% on the agency commission and should not be liable for 100% of the advertisement value.

During the hearing, the learned JDR presented the department's case. After considering the submissions by the appellants, the judge found that a prima facie case was established for staying the recovery of the disputed amount. Consequently, the recovery of the amount was stayed, and the appeal was scheduled for final hearing on 13-7-2005. The decision was pronounced and dictated openly in court.