2018 (9) TMI 1207 - AT - Service Tax

Sale of space or time for Advertising services - Levy of Service Tax - display of advertisement - whether service tax is leviable on the amount collected by Nagar Nigam, Kanpur for allowing display of advertisement under the category of Sale of space or time for Advertising services ? Held that - The issue is no more res-integra and stands settled by Hon ble Gujarat High Court in the case of Selvel Media Services Pvt. Ltd. V/s Municipal Corporation of City of Ahmedabad 2010 (3) TMI 1011 - GUJARAT HIGH COURT and it was held that grant of permission is part and parcel of function of Municipal Corporation in the form of public duty to ensure better Municipal governance and cannot be termed as services rendered to advertising agent. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether service tax is leviable on the amount collected by Nagar Nigam, Kanpur for allowing display of advertisement under the category of 'Sale of space or time for Advertising services'.

Analysis:
The appeal arose from an Order-in-Original passed by the Commissioner, Central Excise, Kanpur, concerning the levy of service tax on amounts collected by Nagar Nigam, Kanpur for displaying advertisements. The original Authority treated the collected amount as consideration for the sale of space or time for advertising services, leading to the imposition of a demand and penalty. The appellant challenged this decision before the Tribunal.

During the hearing, both parties acknowledged that the issue had been settled by previous final orders of the Tribunal in similar cases involving Nagar Nigams. The Tribunal noted that the issue was no longer res-integra, citing a judgment of the Hon'ble Gujarat High Court in a related matter. The Gujarat High Court had ruled that the grant of permission by a Municipal Corporation for advertising purposes is part of its public duty and not a service rendered to advertising agents. Following this precedent, the Tribunal held that amounts collected by Municipal Corporations cannot be considered as consideration for providing advertising services.

Based on the settled legal position and the Gujarat High Court judgment, the Tribunal concluded that the impugned order was unsustainable. Consequently, the appeal was allowed, and the appellant was deemed entitled to consequential relief in accordance with the law. The Tribunal's decision was pronounced and dictated in court, bringing the matter to a close.