2008 (6) TMI 109 - AT - Service Tax

Held that collecting rentals for hiring the hoarding space was brought into the service tax net only w.e.f. 1-5-2006. In view of this for the prior period this would not at all be covered under the service tax net - Even though each activity is related to advertisement, the person carrying out each of the various activities will not be an Advertisement Agency - Prima facie, I find that the appellants have a strong case. Therefore, I grant full waiver of the pre-deposit

Summary

Issues:
1. Requirement of pre-deposit of service tax and penalties based on impugned orders.
2. Interpretation of activities carried out by the appellants and their liability to pay service tax.
3. Applicability of service tax on renting hoarding space prior to 1-5-2006.
4. Definition of taxable services rendered by an Advertising Agency.
5. Legal precedents supporting the appellants' case.

Analysis:
1. The judgment deals with the requirement for the appellants to pre-deposit the specified amounts as per the impugned orders. The orders-in-appeal dated 31-8-2007 mandated pre-deposit amounts for M/s. Yespi Arts and M/s. Yespi Advertisers. The penalties imposed were detailed under various sections of the Finance Act.

2. The learned Advocate argued that the activities of the appellants did not qualify as services rendered by an Advertising Agency under the Finance Act, 1994. He cited statutory provisions and case laws to support this claim. In contrast, the Departmental Representative contended that the services provided by the appellants, such as renting hoardings and painting walls, fell under Advertisement services, making them liable for service tax. The Adjudicating Authority's findings were also referenced to establish the appellants' awareness of their service tax liability.

3. The Tribunal analyzed the applicability of service tax on collecting rentals for hoarding space before 1-5-2006. It was determined that such activities were not covered under the service tax net for the prior period. The judgment emphasized that only services rendered by an Advertisement Agency were taxable, not individual activities related to advertising.

4. To support its decision, the Tribunal referred to several legal precedents, including cases like CCE v. The Incoda and Board of Control for Cricket in India v. CST. These cases established that each activity related to advertising did not automatically classify the performer as an Advertisement Agency. The judgment highlighted that the taxable service was specifically the service or services provided by an Advertisement Agency.

5. Ultimately, the Tribunal found that the appellants had a strong case, leading to a full waiver of the pre-deposit of service tax and penalties imposed. The decision also stayed the amount to be paid by M/s. S.P. Advertisement until the disposal of both appeals, indicating a favorable outcome for the appellants based on the legal analysis and precedents presented during the proceedings.