2013 (8) TMI 528 - AT - Service Tax

Sale of space or time for advertisement section 65(105) (zzzm) Whether magazine is a print media are not liable to pay any Service Tax - Held that - The magazine is a newspaper as defined in the law - the transaction is revenue neutral - the appellant could have taken credit of the Service Tax paid on the transaction as promotion or marketing of the goods come within the purview of input services as defined in rule 2(l) of the CENVAT Credit Rules, 2004. Stay application - unconditional waiver of pre-deposit of the dues and stay granted.

Summary

Issues:
1. Whether the appellant is liable to pay Service Tax for placing an advertisement in a foreign magazine.
2. Whether the magazine qualifies as "Print Media" under the definition provided in the law.
3. Whether the demand for Service Tax is time-barred.
4. Whether the appellant is eligible for availing credit on the Service Tax paid.

Detailed Analysis:
1. The appellant, a manufacturer of machinery for the fertilizer industry, advertised in a UK magazine called "Fertilizer Focus." The department contended that the consideration paid for the advertisement made the appellant liable for Service Tax under "Sale of space or time for advertisement" services. A demand for Service Tax of Rs.32,642/- was confirmed, along with penalties. The appellant argued that as per the definition, the sale of space for advertisement in print media is excluded from Service Tax liability. The appellant also claimed that if taxed, they could avail credit under input services, making the transaction revenue neutral. The appeal was against the Order-in-Appeal dated 28.06.2012.

2. The definition of "Print Media" under section 65(105)(zzzm) excludes sale of space for advertisement in print media. The appellant argued that the magazine falls under "Print Media" as defined in the law. The magazine, published once in two months, contains news, articles, and statutory provisions related to the fertilizer industry. It caters to the public connected with the industry, including users, manufacturers, farmers, and scientists. The Tribunal found that the magazine qualifies as a newspaper under the Press and Registration of Books Act, 1867, as it contains public news and comments relevant to the industry.

3. The appellant contended that the demand for Service Tax was time-barred as the show-cause notice was issued on 07.01.2011 for the period 2006-07 and 2007-08. However, the Tribunal did not provide a specific ruling on the time-barred issue in the summary provided.

4. The appellant argued that they should be eligible for availing credit on the Service Tax paid, as promotion or marketing of goods falls under input services as per the CENVAT Credit Rules, 2004. The Tribunal acknowledged that the transaction was revenue neutral, indicating that the appellant could have taken credit on the Service Tax paid. Consequently, the Tribunal granted unconditional waiver of pre-deposit of the dues and stayed the recovery during the appeal's pendency.