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TMI Blog2004 (8) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants were of the view that they did not come under the purview of advertising agency, they did not get themselves registered or paid the service tax under the said category. 4. It is necessary for me to advert to the background material as available for ready appreciation of the issue. In January 1998, the appellants and also similarly placed persons were contacted by the Department by letter dated 13-1-1998 advising that they are required to pay the service tax after getting themselves registered under the category of Advertising Agency . 5. The Appellants vide their letter dated 31-1-1998 stated that they are engaged in only obtaining/canvassing the advertisements from the potential advertisers and passing on the same to the publishers and therefore they do not come under the category of advertising agency. A further letter in response to this letter was received from the authorities in February 1998 and this was replied to by the Appellant in March 1998. Nothing thereafter was heard from the Department. 6. However three years thereafter, a communication dated 19-9-2001 was received again advising the appellants to register themselves and to pay tax. 7. In August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urs first among the sub-clauses which equally merit consideration. 13. The Original Authority justified the demand on the ground that the commission received by the appellants from the publisher is alone being taxed and to this extent the Circular issued by the Board on 31-10-1996 renders necessary support. 14. Accordingly, he not only upheld the demand by invoking the extended period of five years but also imposed penalty and charged interest. Aggrieved with this order the appellants are in appeal contending that : 1. The appellants were only canvassing for advertisement and pass on the advertisement material received from the advertiser to the publishers. They do not undertake any estimation of the space, negotiation of the price, general layout of the advertisement, etc. The cost of advertisement is clearly and already pre-determined by the publisher and also published from time to time. The Appellants do not have any discretion to negotiate with regard to the cost of advertisement. Similarly, the layout of the advertisement is determined by the publisher/advertiser and not by the appellants. Hence the service of the appellants is clearly space selling or canvassing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new category of service namely business auxiliary service . 6. The Original Authority relied upon sub-clause (105) of Section 65 and more particularly sub-clause (c) Section 65A(2) to hold that between advertising agency service and business auxiliary service , the appellants are covered under Advertising Agency on the ground that it is more specifically covered under advertising agency service . This reasoning is totally incorrect. Clause (c) reads as under : (c) When a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause, which occurs first among the sub-clauses which equally merit consideration. 7. For applying clause (c) only when a service cannot be classified under clause (a), clause (c) can be applied. The reference to clause (c) would clearly indicate that the service in question cannot be classified in terms of clause (a). This itself would defeat the reasoning of the Original Authority. 8. The recognition of the possibility of the service in question being covered under the category of business auxiliary service would itself preclude the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be determined. In that context the question whether the commission received by the agency is to be excluded or not was the dispute therein. In that context it was held that whatever the agency charges from the customer is liable to tax including the commission received which has not been passed on to the customer. Hence it has got no relevance whatsoever in the present context wherein the activity whether would it fall under the category of advertising agency or not is under dispute. This was not the dispute either in the circular dated 31-10-1996 or in the judgment of the Madras High Court. 20. It is well settled proposition of law that where a dispute has not been raised or considered and decided upon, the said decision cannot be relied upon in support of such a proposition as held by the Hon ble Supreme Court in the case of Mittal Engineering reported in 1996 (88) E.L.T. 622 (S.C.). 21. I also find that in any case the quantification is incorrect. The total amount of commission received is to be considered as cum-tax and the tax should be excluded in arriving at the value liable to tax as clarified by the Delhi Commissionerate vide Trade Notice No. 20 dated 23-5-2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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