2018 (9) TMI 832 - AT - Service Tax

Advertisement services - sub-contract - Sale of space or time for advertisement - Held that - Admittedly appellant paying taxes under the head of sale of space or time for advertisement for the activities in the period subsequent to the period under dispute. Their sole difference is that M/s. SFIL had paid tax on the entire amount received by them under the head of Advertising Agency and the value for which these proceeding has been initiated are already included in the following for which SFIL has claimed to have discharged the liability - the argument is based on the certificate given by financial Controller of Frontiers Group (India) Pvt. Ltd. dated 14/08/2009 to the effect that the Frontiers Group (India) Pvt. Ltd. had already discharged the service tax liability on the Revenue realized by them. The certificate nowhere states that they have discharged the liability on the entire amount received by them without any reduction on account of any expenses/abatements. From the said certificate it is also not clear if they had realized the entire amount and if the amount on which they have paid the exceeded the amount paid to the appellant - demand upheld. Levy of service tax - Revenue collected by printing advertisement behind the tickets - Held that - The space and time on LED screen belong to the appellant and they have allowed advertisement on the same by various advertisers and received Revenue on that account. This definitely constitute sale of space or time for advertisement. The demand on these accounts is also upheld. Penalties u/s 76 - Held that - The law laid down is very clear and there is no scope for interpretation. The penalty under section 76 is also sustained. Appeal dismissed - decided against appellant.

Summary

Issues involved:
Confirmation of demand of Service Tax and imposition of penalties on M/s Saurashtra Cricket Association for conducting cricket matches and granting advertising rights.

Analysis:
The appellant argued that M/s Sporting Frontiers (India) Pvt. Ltd. had already paid tax on the consideration received for advertising rights, thus no additional tax should be levied. They cited precedents to support their claim. The appellant contended that they were merely subcontractors, and since the main contractor had paid tax, they should not be liable for further taxation. Additionally, they disputed the tax demand on the sale of space for advertisement on tickets, claiming it was excluded under section 65(105)(zzzm). They also argued that displaying advertisements on LED screens did not constitute sale of space or time for advertisement. The appellant challenged the imposition of penalties under section 76, stating that the issues were matters of interpretation and should not warrant penalties, citing relevant case law.

The tribunal observed that while M/s Sporting Frontiers (India) Pvt. Ltd. had paid tax under the category of 'Advertising Agency,' the value for which proceedings were initiated was not fully accounted for. The tribunal noted discrepancies in the tax payment certificate provided and highlighted the distinction between the present case and the precedents cited by the appellant. The tribunal upheld the demand for service tax related to the sale of space or time to M/s SFIL.

Regarding the printing of advertisements behind tickets, the tribunal rejected the argument that tickets could be considered as books, as per the legal definition. The demand for service tax on this revenue was upheld. Similarly, the tribunal dismissed the appellant's claim that displaying advertisements on LED screens did not amount to sale of space or time for advertisement, stating that allowing advertisements on their property constituted such a sale.

In terms of penalties, the tribunal found no ambiguity in the law and upheld the imposition of penalties under section 76. Consequently, the appeal by M/s Saurashtra Cricket Association was dismissed, and the decision was pronounced on 10.09.2018.