2011 (9) TMI 392 - AT - Service Tax

Taxability - whether discounts/incentives given to the appellant as an advertising agency would be liable for the service tax under the business auxiliary services - As per the the coordinate Bench of the Tribunal decision in the case of Kerala Publicity Bureau 2007 -TMI - 2534 - CESTAT, BANGALORE , held that the discounts/incentives received by the assessee from the print media will not be liable for service tax under the category of advertising agency services - Decided in favour of assessee.

Summary

Issues:
Stay petitions for waiver of pre-deposit of service tax demand, penalties under Sections 76 and 77 on discounts/incentives received by an advertising agency for publishing advertisements.

Analysis:
The Tribunal addressed two stay petitions seeking the waiver of pre-deposit amounts involving service tax demand and penalties imposed on an advertising agency for receiving discounts and incentives. The Tribunal noted that the issue in both petitions was identical and pertained to the same assessee, leading to a common order for disposal. The amounts in question were confirmed by the adjudicating authority and upheld by the first appellate authority as service tax liability on the discounts and incentives received by the appellant as an advertising agency from the media. The Tribunal considered arguments presented by the learned counsel and the departmental representative, emphasizing the applicability of service tax on the discounts and incentives.

The Tribunal referred to previous cases decided by the same Bench where similar issues were addressed, highlighting the decisions in favor of the assessees. After hearing both sides, the Tribunal observed that the appeals could be disposed of based on the precedent set by a coordinate Bench of the Tribunal in an identical issue. Consequently, the stay petitions for the waiver of pre-deposit amounts were allowed, and the appeals themselves were taken up for disposal. The Tribunal reviewed the impugned orders and noted the findings recorded by the Commissioner (Appeals) regarding the taxability of discounts and incentives received by the advertising agency.

The Tribunal analyzed the argument regarding the liability of discounts and incentives for service tax under business auxiliary services, referencing the decisions of the coordinate Bench in similar cases. It was concluded that the discounts and incentives received by the appellant from the print media should not be considered liable for service tax under the category of business auxiliary services, as they were related to advertising agency services. Following the view taken by the coordinate Benches in identical issues, the Tribunal set aside the impugned orders, allowed the appeals, and disposed of the stay petitions accordingly.