2009 (4) TMI 84 - SC - Service Tax

Whether an assessee comes within the definition of the word advertising agency as amended - we set aside the order of the High Court & Tribunal, giving final opportunity to the appellant herein to produce all the relevant records particularly to show the nature of the work - matter remitted to the Tribunal which would examine whether the appellant herein is undertaking the work of conceptualising, visualising and creating the advertisement or whether it is only complying with the instructions of its clients

Summary

Issues: Definition of 'advertising agency' under Section 65(3) of the Finance Act, 1994.

In the judgment delivered by the Supreme Court, Justices S.H. Kapadia and Aftab Alam, it was noted that a crucial legal question arose regarding whether an assessee falls within the definition of an 'advertising agency' as per Section 65(3) of the Finance Act, 1994. The Court highlighted the absence of essential documents like orders, purchase materials, and books of accounts before the Tribunal and Adjudicating Authority, despite requests. The High Court's order pointed out this deficiency. Consequently, the Supreme Court overturned the decisions of both the High Court and the Tribunal, granting the appellant a final opportunity to submit all relevant records demonstrating the nature of work undertaken. The matter was remitted to the Tribunal for a detailed examination to determine if the appellant engages in conceptualizing, visualizing, and creating advertisements or merely follows client instructions, emphasizing the need for additional information. As a result, the orders of the Tribunal and the High Court were set aside.

Furthermore, the judgment concluded by disposing of the Civil Appeal, with the stipulation that the assessee must pay a cost of Rs. 10,000 to the Department as a condition precedent. This cost was imposed in light of the legal proceedings and the need for clarity on the nature of the appellant's work in the advertising domain.