2018 (5) TMI 982 - AT - Service Tax

Classification of services - appellant is engaged in collecting advertising material from their clients and forwarding the same to the newspaper for advertising in the newspaper - whether classified under advertising service or otherwise? Held that - the activity for which the Tribunal has decided the case for the appellant in earlier period SPRING ADVERTISING PVT LTD Versus COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, AURANGABAD 2014 (8) TMI 146 - CESTAT MUMBAI , is the same as in the present case, where it was held that The admitted fact is that the appellants are not undertaking any activity connected with the making, preparation, display etc and the appellants are only collecting the advertising and the same is forwarded to various newspapers for publication. A reading of the definition of advertising agency shows that a person should be engaged in providing any service connected with the making, preparation, display or exhibition of advertisement, assessee thus not liable to tax under the head. Demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of service under advertising service for service tax liability.

Analysis:
The case involved a dispute regarding the classification of the appellant's service under advertising service for the purpose of service tax liability. The Revenue contended that the appellant's activity of collecting advertising material and forwarding it to newspapers falls under advertising service, thus attracting service tax. However, the appellant argued that a previous Tribunal order had already settled the issue in their favor. The Assistant Commissioner representing the Revenue maintained that the facts of the present case warranted a different classification than the previous case, emphasizing that the appellant's activity was indeed classifiable under advertising service.

Upon careful consideration of the submissions and records, the Tribunal found that the activity in question was the same as the one decided in the previous order dated 26.6.2014. The Tribunal noted that no new facts were presented in the current case, and therefore, the decision from the earlier period was applicable. The Tribunal referred to the specific findings in the previous order, highlighting that the appellant was not engaged in activities related to the making, preparation, display, or exhibition of advertisements. As per the definition of an advertising agency under Section 65(3) of the Finance Act, 1994, it was established that the appellant's role of collecting and forwarding advertisements did not fall under the category of an advertising agency. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting the appellants consequential relief as per the law.

In conclusion, the Tribunal, based on the precedent set by the previous order and the legal interpretation of the definition of an advertising agency, ruled in favor of the appellant, holding that their service did not qualify as advertising service for the purpose of service tax liability. The impugned order was set aside, and the appeal was allowed, providing relief to the appellants.