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TMI Blog2012 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... e said parties are registered with the service tax department - Held that:- there is difference of opinion between Member (Tech) and Member (Judicial), the registry of the Tribunal is directed to place the case papers before Hon ble President for nominating a third Member for decision - Service Tax Appeal No.250 of 2011 - - - Dated:- 23-1-2012 - Ms. Archana Wadhwa, Mr. Rakesh Kumar, JJ. Present for the Appellant Shri A.R.Madhav Rao, Adv. Present for Respondent Shri Amresh Jain, DR Per Ms. Archana Wadhwa: The Commissioner vide his impugned order confirmed service tax of Rs.1,25,23,555/- against the appellants along with imposition of penalties u/s 78, 76 and 77 of the Finance Act, 1994. 2. After hearing both the sides, we find that the impugned order confirms two Show Cause Notices as detailed below issued to the noticee:- (i) Show Cause Notice dtd. 27.11.08 proposing the demand of Rs.92,30,754/- for the period 1.05.06 to 31.03.08. (ii) Show Cause Notice dtd. 20.10.09 proposing duty demand of Rs.48,18,165/- for the period 1.04.08 to 31.03.09. 3. The appellants entered into a contract with one M/s Shri Durga Publicity Service and certain other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the revenue by drawing our attention to the definition of Sale of Time or Space for Advertisement submits that the definition of the service is the services provided by any person in relation to sale of space for advertisement, in any manner. As such he submits that unless the space is granted by the Municipal Corporation, the erection of sky signs etc. is not allowed. Further the expression in relation to make the definition very wide. He also submits that the sides of the bridge have to be used for putting various advertisement signs. As such it can be safely concluded that the appellants have rendered service for sale of space and have collected money for the same, though as the cost of the construction of the bridge. 8. After appreciating the submissions made by both sides, we find that M/s Shri Durga Publicity Service have financed the project by Municipal Corporation. In lieu of that they have got the space for placing various advertisements on the unipoles, sky-signs, street light poles etc. for a number of 11 years from the date of payment of finances to Municipal Corporation. 9. Viewed it from other angle, we note that if the Municipal Corporation have themse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.09 would be prima-facie, partially barred by limitation. As such by taking into account the overall facts and circumstances of the case, we direct the appellants to deposit an amount of Rs. 50 lakhs out of the total confirmed demand of Rs.1,25,23,555/-. The said deposit is required to be made within a period of 12 weeks from the date of pronouncement of the order. Subject to deposit of the above amount, the pre-deposit of balance amount of duty and entire amount of penalty shall stands waived and its recovery stayed during pendency of the appeal. Matter to come up for ascertaining compliance on ______. (Pronounced in the Open Court on 23.01.12) (Archana Wadhwa) Judicial Member (Rakesh Kumar) Technical Member RK-I Per: Sh. Rakesh Kumar: 12. I have gone through the order prepared by my learned sister. Since I am not in agreement with the same, I am recording a separate order. 13. The appellant Municipal Corporation, Jalandhar, entered into an agreement dated 17.7.2006 with M/s Shri Durga Publicity Service, Amritsar under which the latter were to invest Rs. 18 crores for construction of flyover on Jalandhar Kapurthala Railway line and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner on the ground that the Municipal Corporation suppressed the fact regarding receipt of amounts from various parties for providing service in relation to sale of space for advertisement. Against this order of the Commissioner, this appeal alongwith stay application has been filed. 14. In course of hearing of the stay application, Shri A.R. Madhav Rao, Advocate the learned Counsel for the Appellant, emphasized that the agreements of the Appellant with various parties including M/s Shri Durga Publicity are licensing agreements under which M/s Shri Durga Publicity and other parties have been granted permission to put up unipoles, kiosks, skysigns, lollipops etc. at different places within the jurisdiction of Municipal Corporation for the purpose of advertisement, that the Appellant have not sold any advertising space and it is M/s Shri Durga Publicity and others who have sold the space for advertisement; that the amount received by the Appellant from M/s Shri Durga Publicity and other is advertisement tax levied by them in accordance with their resolutions duly approved by the Government of Punjab; that this advertisement tax, collected in exercise of sovereign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el pole or column. Kiosks are two sided rectangular bill boards put up on street light poles. Lollipops are illuminated advertisement signs mounted on poles. The poles or steel structures required for mounting these advertisement signs require very small space and as mentioned above, kiosks are put up on existing light poles. It is also clear that the unipoles, kiosks, skysigns, lollipops etc put up by various parties are their property and are not owned by the Appellant. The advertisement are put up on the space on the unipoles, kiosks, skysigns, lollipops etc., not on the land, which is very small or on light poles on which such unipoles, kiosks, skysigns, lollipops etc. have been erected/ mounted. In the expression service in relation to sale of time or space for advertisement , the advertising space whose sale can be taxed under Section 65 (105)(zzzm) of the Finance Act, 1994 is the space on bill boards, public places, buildings, bus shelters, conveyances etc and not the land on which bill boards, unipoles, kiosks, skysigns, lollipops etc. have been allowed to be erected. Permitting erection or fixation of bill boards, unipoles, skysigns etc by a person on his land or a corner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this is a fit case for granting dispensation from the requirement of pre-deposit under Section 35F of the Central Excise Act, 1944 as applicable to service tax matter under Section 83 of the Finance Act, 1994. The requirement of pre-deposit of service tax demand, interest and penalty for the purpose of hearing of this appeal is, therefore, waived and recovery thereof is stayed till the disposal of the appeal. The stay application is allowed. (Rakesh Kumar) Member (Technical) 18. Since there is difference of opinion between Member (Tech) and Member (Judicial), the registry of the Tribunal is directed to place the case papers before Hon ble President for nominating a third Member for decision on the following points of difference: i) Is the activity of the Appellant, in the background of the fact of this case, prima-facie covered by Section 65(105)(zzzm) of the Finance Act, 1994 for being subjected to service tax as service in relation to sale of time or space for advertisement? ii) Can the advertisement tax collected by the Appellant from M/s Shri Durga Publicity and Others on their advertisement revenue, under the Appellant s resolution ratified by Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idge and allowing the financier to put up advertising boards on such facility is not involved. 23. Under the entry in Section 65(105)(zzzm) taxable service is service to any person, by any other person, in relation to sale of space or time for advertisement, in any manner. Sale of space or time for advertisement includes providing space or time, as the case may be, for display, advertising, showcasing of any product or service in video programmes, television programmes or motion pictures or music albums, or on billboards, public places, buildings, conveyances, cell phones, automated teller machines, and internet . The explanation under the entry explaining the scope of the term sale is also to be taken into account. This reads as under : Explanation 1. For the purposes of this sub-clause, sale of space or time for advertisement includes, - (i) providing space or time, as the case may be, for display, advertising, showcasing of any product or service in video programmes, television programmes or motion pictures or music albums, or on billboards, public places, buildings, conveyances, cell phones, automated teller machines, internet; (ii) ---- 24. The dispute is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a private person, as distinguished from AMC, a public body, the act of granting written permission cannot be treated to be a sale of space for advertisement, that is providing space for display. Therefore, once it is found that AMC is not rendering any taxable service to the petitioner, in the facts of the present case, it is not possible to uphold the action of AMC in calling upon the petitioner to make payment of service tax. 14. There is one more aspect of the matter. The provision nowhere envisages AMC being entitled to charge and collect service tax on the fees charged and collected by AMC for granting written permission. AMC cannot act as an agent for the purpose of recovery of service tax, even if one assumes that the service provided by the petitioner to the client of the petitioner might be a taxable service. In the facts of the present case, it is nobody s case that the demand has been raised by the Service Tax Department on the petitioner in relation to the service rendered by the petitioner to its client. Hence, it is not necessary to dwell any further on this aspect of the matter, namely, whether the petitioner is rendering any service to its client so as to be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or renting of space by the Corporation. He also relies on Section 90 of Punjab Municipal Corporation Act, 1976 giving the powers to the corporation to tax advertisements and also Notification No. 14/80/2005-1 LGI/6792, dated 19-5-2005 issued by Government of Punjab, Department of Local Government (LG-I Branch) specifying the rates for taxes and also the receipts issued which shows the actual conduct of the parties under the agreement. A power to tax cannot be considered to be given up through an agreement. It has to be done by a notification issued under powers in Section 90(3) read with Section 122 of the Punjab Municipal Corporation Act, 1976 to be issued by Punjab Government. The Corporation by issuing receipts as advance tax is confirming the fact that there is in fact no exemption and the money received is towards tax only. Further the powers of the Corporation under Section 88 of the Act to re-adjust income also is to be taken into account. 31. Para 4(II) of the contract relied upon by the Counsel to show that the powers exercised in the matter is regulatory in nature, reads as under : 4(II) the agency shall ensure the following :- (a) All unipoles will be fixed withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33. The Corporation has powers to tax advertisements and it is imposing tax on all other advertisements. No case is made out that the money received is in excess of the advertisement taxes that are notified under Notification No. 14/80/2005-1 LGI/6792, dated 19-5-2005 issued by Government of Punjab, Department of Local Government (LG-I Branch). There appears to be no notification issued by the Punjab Government exempting this tax to be paid by SDPS. So it is not reasonable to conclude that the money paid is for sale of space. If there is such a case the matter can be examined at the time of final hearing of appeal. It would prima facie appear that the money received is towards compounded future tax that is normally levied by the Corporation while allowing parties to put up advertisements. 34. I also note that the Central Government is actually not effectively losing any service tax in the matter because if SDPS is to pay service tax for payments made to the Corporation SDPS can take credit of the tax so paid for paying service tax when it pays service tax on selling of the space to actual advertisers. Of course there will be difference in time of payment of tax and the quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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