2016 (1) TMI 205 - AT - Service Tax

Advertising services or not - Appellant herein is undertaking an advertising business as well as creating infrastructure like stand for display of advertisements at various places for the clients. - Held that - Appellant produced copies of agreement entered with the owners of the property taken on rent by the appellant and it is undisputed that appellant is paying rent of the space to the parties. On the infrastructure so created appellant displays the advertisement in form of billboards and collects rent for such display. Both the lower authorities have overlooked the fact that appellant is not engaged in any services connected with making preparation display or exhibition of advertisement while renting out the infrastructure. Appellant has made out a case in his favour and the appeal needs to be accepted. - Decision in the case of Star India (P) Ltd - 2006 (2) TMI 50 - CESTAT MUMBAI followed. - Decided in favor of assessee.

Summary

Issues:
- Whether the activity undertaken by the appellant is taxable under the head "advertising services" or otherwise.

Analysis:
The appeal in this case revolves around determining whether the appellant's activities fall under the taxable category of "advertising services." The appellant is engaged in an advertising business and also creates infrastructure like stands for displaying advertisements at various locations. The revenue argues that the amounts received by the appellant for renting out stands constitute advertising services. However, upon review of the records, it is evident that the appellant secures prominent spaces in the city on a rental basis, installs infrastructure including boards, and displays advertisements on these structures. The appellant pays rent for the space taken on rent and collects rent for displaying advertisements. The lower authorities failed to acknowledge that the appellant is not directly involved in services related to the making, preparation, display, or exhibition of advertisements while renting out the infrastructure. Reference is made to a previous Tribunal judgment in the case of Star India (P) Ltd, emphasizing the importance of interpreting definitions within the context of the phrase defined. The judgment highlights that the term "advertising agency" should not be interpreted literally and out of context to avoid absurd outcomes where any person connected with an advertisement is classified as an advertising agency. The definition of "advertising agency" must be understood in a restrictive manner within the specific context.

The Tribunal concludes that the appellant has presented a strong case in their favor based on the facts and circumstances of the situation. Consequently, the impugned order is set aside, and the appeal is allowed with any consequential relief that may be applicable.