2009 (8) TMI 726 - AT - Service Tax

Waiver of pre-deposit - Service tax only on commission/discount or on whole amount recovered by them towards time slot booked by them - appellants have included the Service tax and shown the gross amount as cost for the times lot appellant paid service tax appellants in turn have to collect from the customers Held that - appellants should have taken credit of Service tax paid by the broadcaster and charged the Service tax on the full amount to the clients and utilize the service tax credit for payment of Service tax - Prima facie demand for the service tax by the Revenue amounts to collection of Service tax on the same amount twice pre-deposit waived

Summary

Issues:
1. Liability of service tax on the entire amount collected by the appellants.
2. Applicability of the definition of broadcasting agency to the appellants.
3. Bar on demand by limitation.

Analysis:
1. The appellants, a registered service provider of an advertising agency, were demanded service tax on the total amount collected from clients for time slots sold by them. The issue was whether the appellants are liable to pay service tax on the entire amount or only on the commission/discount received by them. The appellants argued that they are not broadcasting agencies but advertising agencies, and the demand for service tax on the total amount collected may amount to double taxation. The Tribunal found that the demand by the Revenue seemed like a procedural irregularity, as the appellants should have taken credit for the service tax paid by the broadcaster and charged service tax on the full amount to the clients. The Tribunal noted that further examination of evidence and arguments was needed but observed that the appellants had made a strong case in their favor, leading to the unconditional allowance of the stay petition.

2. The advocate for the appellants argued that they do not fall under the definition of a broadcasting agency as per the Finance Act, 1994. He cited a clarification by the TRU supporting their case, emphasizing that the appellants book time slots and are not broadcasters but advertising agencies. On the contrary, the SDR cited a Tribunal decision and contended that the definition of broadcaster provided by the advocate was incorrect. The Tribunal acknowledged the differing interpretations and noted the need for a detailed examination of the definition in relation to the appellants' activities.

3. The appellants also raised the issue of the demand being barred by limitation. However, the judgment did not provide a detailed analysis or conclusion on this specific issue. The focus remained on the liability of service tax and the interpretation of the broadcasting agency definition in relation to the appellants' business activities.

In conclusion, the judgment primarily revolved around the liability of service tax on the total amount collected by the appellants, their classification as a broadcasting agency, and the procedural aspects of service tax payment. The Tribunal acknowledged the need for further examination of evidence and arguments to arrive at a final decision on the matter.