2012 (7) TMI 106 - AT - Service Tax

Demand of service tax - advertisement agency service - activity for arranging the celebrities for promotion Held that - Applicants does not cover under definition of advertising agency service and from 1.7.2003 they are paying service tax under the category of business auxiliary service as the service has been brought under the service tax with effect from 1.7.2003. In favor of assessee.

Summary

Issues:
Demand of service tax under advertisement agency service for arranging celebrities for promotion and publicity.

Analysis:
The judgment dealt with the issue of demand of service tax amounting to Rs.27,46,030/- against the applicant for arranging celebrities for promotion and publicity of a two-wheeler manufactured by a company. The department contended that this activity fell under the category of advertisement agency service, leading to the issuance of a show-cause notice and subsequent confirmation of demands.

The applicant, through their advocate, argued that the activity did not fall under the definition of advertising agency service. They highlighted that post-July 2003, they had been paying service tax under the category of business auxiliary service, indicating a change in the tax treatment of the service provided.

Upon hearing the arguments, the Tribunal observed that prima facie, the activity undertaken by the appellant did not fall under the category of advertisement agency service. Consequently, the Tribunal found merit in the applicant's case for waiver of pre-deposit and granted the waiver of the entire amount of service tax, interest, and penalties. Additionally, the Tribunal stayed the demands during the pendency of the appeal, providing relief to the appellant.

In conclusion, the judgment clarified the tax treatment of the service involving arranging celebrities for promotion and publicity, ruling in favor of the applicant by granting a waiver of pre-deposit and staying the demands during the appeal process.