2017 (8) TMI 550 - AT - Service Tax

Advertisement Agency Service - job-work - case of appellant is that the activity undertaken by them did not involve any designing, visualizing or conceptualizing in fabricating and erecting sing boards and therefore such activities would not fall under the category Advertisement Agency Service - Held that - there is no evidence before us to establish that the appellants are involved in any making or preparation of an advertisement such as designing, visualizing, conceptualizing etc. to fall under the definition of Advertisement Agency Service - demand unsustainable. Time limitation - Held that - The period covered is from October 1999 to September 2004 and the SCN is dated 12-20/4/2005. Major portion of the demand falls beyond the normal period of limitation - we cannot find fault with the appellant who bonafidely believed that they are not liable to pay service tax and had not discharged the same. It is also to be noted that the appellant has given all the required information as and when called for by the department - extended period not invocable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Confirmation of tax demand for non-payment of service tax under Advertising Agency Service category
- Appellant's argument on the nature of work undertaken for clients
- Appellant's reliance on trade notices and judicial precedents
- Argument on limitation period for the demand
- Respondent's defense based on the definition of Advertising Agency
- Tribunal's analysis on the merits of the case and limitation period

Confirmation of Tax Demand:
The appellant was issued a show cause notice for non-payment of service tax under the Advertising Agency Service category for a specific period. The original authority confirmed the tax demand, along with interest and penalties under sections 76 and 78 of the Finance Act, 1994. The Commissioner (Appeals) upheld the decision, leading to the current appeal.

Appellant's Argument on Work Undertaken:
The appellant argued that their work for clients did not involve designing, visualizing, or conceptualizing advertisements. They provided details of job work done for clients like Pepsico and Indian Oil Corporation, emphasizing that their activities did not fall under the definition of an advertising agency. The appellant cited trade notices and judicial precedents to support their claim.

Argument on Limitation Period:
The appellant raised the issue of limitation, stating that the show cause notice was dated beyond the normal period of limitation. They contended that there were doubts regarding the definition of "advertising agency," and their belief that their activities were not subject to service tax was reasonable. The appellant cooperated with the investigation and provided all necessary information.

Respondent's Defense:
The respondent argued that the appellant's activities, including making signboards, flux boards, and fixing/replacing vinyl stickers, fell within the definition of an advertising agency. They referred to the definition of Advertising Agency and Advertisement to support their position.

Tribunal's Analysis:
The Tribunal examined the purchase orders provided by the appellant and found that the activities undertaken did not involve designing or conceptualizing advertisements. Citing trade notices and judicial precedents, the Tribunal concluded that the demand for service tax alleging advertising agency services was unsustainable. The Tribunal also addressed the issue of the limitation period, noting the controversies surrounding the definition of an advertising agency. The demand based on the extended period of limitation was deemed unsustainable, and the penalties imposed were found to be not simultaneously imposable.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief.