2014 (8) TMI 582 - AT - Service Tax

Classification - Business Auxiliary Service or Advertising Agency Service - Held that - On going through the specimen of the publication produced before us which clearly shows that the appellant are advertising the materials supplied by their clients and they are providing the space/slot for advertisement in their publication for their clients. The said activity is covered under the category of Advertising Agency Service and the same is liable to service tax for sale of space/slot for advertisement. The appellant are also paying service tax on the said activity w.e.f. 1-5-2006 onwards - activity of the appellant does not cover under the category of Business Auxiliary Service - Decided in favour of assessee.

Summary

Issues:
- Appeal against demand for service tax under "Business Auxiliary Service" for a specific period.

Analysis:
The appeal in question pertains to a demand for service tax under the category of "Business Auxiliary Service" for a defined period. The appellant, a publisher of a newsletter, procured advertisements from mutual funds for publication in their newsletter. The issue raised was whether by publishing these advertisements, the appellant was promoting the business of their clients and thus liable to pay service tax under the "Business Auxiliary Service" category.

Upon reviewing the facts and the publication specimen provided, the Tribunal observed that the appellant was primarily advertising materials supplied by their clients and providing space/slot for advertisements in their publication. This activity was deemed to fall under the category of "Advertising Agency Service," making it liable for service tax for the sale of space/slot for advertisements. Notably, the appellant had already been paying service tax on this activity from a specified date onwards.

Consequently, the Tribunal concluded that since the appellant's activity did not fall under the ambit of "Business Auxiliary Service," the impugned order was set aside. The appeal was allowed with consequential relief, if any, and the stay application was disposed of accordingly. The Tribunal's decision was made after considering the nature of the appellant's activities and the applicable service tax categories, ultimately leading to the dismissal of the demand for service tax under "Business Auxiliary Service" for the specified period.