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TMI Blog2014 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... dent vide her letter dated 18/05/11 stated that she is engaged in brand promotion which is taxable since 01/07/10 and that prior to 01/07/10 she had not provided any taxable service other than renting of immovable property (since 01/06/07). From subsequent inquiry it appeared that she had entered into agreements with M/s Hindustan Lever Ltd., M/s Colgate Palmolive, M/s TTK Healthcare Ltd., M/s Saravana Jewellers, M/s Bhima Jewellers, M/s Procter & Gamble Ltd., M/s Idea Cellular, M/s Zydus Wellness Ltd., M/s United Biscuits Pvt. Ltd., M/s Elder Pharmaceuticals, M/s Raymond Weil India Pvt. Ltd. etc., for promotion of their products/services. The perusal of the agreements indicated that these agreements entered into during the period from 2006-2007 to 2010-2011 were for promotion or marketing of the goods produced by her clients or promotion or marketing of the services provided by the clients and, as such, these agreements did not appear to be merely for brand promotion and, therefore, the activity of the respondent in terms of these agreements appeared to be 'Business Auxiliary Service' taxable under Section 65 (105) (zzb) readwith Section 65 (19) of the Finance Act, 1994. The total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 1994 directed the Commissioner to apply to The Customs, Excise and Service Tax Appellate Tribunal for correct determination of the points, as mentioned, in the order. 1.5 In pursuance of this order of the Committee of Chief Commissioners, the present review appeal has been filed by the Commissioner. 2. Heard both the sides. 3. Shri Amresh Jain, the learned DR, assailed the impugned order by reiterating the grounds of appeal in the Revenue's appeal and pleaded that the respondent had involved herself in advertisement campaigns for promotion of various products or services of her clients, that from the respondent's agreements with M/s Idea Cellular and M/s Hindustan Lever Ltd., it is clear that she had provided the services relating to promotion of their services and products through advertisement campaign, that from the respondents agreements with M/s Khazana Jewellers and M/s Saravana Jewellers, it is clear that she had provided service relating to promotion of the jewellery through advertisement campaigns, that similarly the respondent had promoted the marketing of Lux soap for M/s Hindustan Lever Ltd., Tea for M/s Brook Bond Tea, Eva Talcom Powder for M/s TTK Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular products or services of the clients, that the Business Auxiliary Service covered by Section 65 (105) (zzb), taxable since 01/07/03, covers among other activities, the promotion or marketing or sale of goods produced or provided by or belonging to client or promotion or marketing of services provided by the clients and according to the department, the respondent's activities amount to promotion or marketing of the goods produced/provided/belonging to client or promotion or marketing of services provided by the clients, that from the various agreements of the respondent with her clients, it is clear that the emphasis in these agreements is on marketing or promotion of the brand of the client and not the marketing or promotion or sale of any particular goods or particular services, that the service of brand promotion became taxable under Section 65 (105) (zzzzq) only w.e.f. 01/07/10, that the respondent also rely upon the Board's Circular No. 334/1/2010-TRU dated 26/02/10, wherein it has been clarified that while promotion or marketing or sale of goods produced provided or belonging to a client and promotion or marketing of services provided by the client are already covered und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a reputed public figure ; (b) she had entered into contracts with M/s Khazana, M/s Hindustan Lever Ltd., M/s TTK Healthcare Ltd., M/s Saravana Jewellers, M/s Bhima Jewellers, M/s Procter & Gamble Ltd., M/s Idea Cellular, M/s Zydus Wellness Ltd., M/s United Biscuits Pvt. Ltd., M/s Elder Pharmaceuticals, M/s Hiranandani Builders, M/s Kalyan Sarees, M/s Colgate Palmolive Ltd., M/s Reymond Weil India Pvt. Ltd. etc. for promotion of their products and services by appearing in their advertisements and promotional events or carrying out promotional activities ; and (c) for these services, the respondent was receiving an amount every year for the period of contract, as specified in each contract. 6.1 In this regard one of the sample contract of the respondent with M/s Idea Cellular Ltd. mentions that the respondent is agreeable to make herself available for 10 days per year to render services under this contract at the request of the company for the consideration and on the terms and conditions as specified in this contract and the services to be provided are - (I) endorse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Commissioner, is that the services provided by the respondent to her clients are the services of promotion or marketing of brand of goods under a contract and are covered by Section 65 (105) (zzzzq) of the Finance Act, 1994 which became taxable w.e.f. 01/07/10 only and during the period of dispute the activity of the respondent was not taxable. 8. Section 65 (105) (zzb) covers service provided or to be provided to a client by any person in relation to 'business auxiliary service'. The term 'Business Auxiliary Service' is defined in Section 65 (19) of the Finance Act, 1994 which is reproduced below :- Section 65 (19) : 'business auxiliary service' means any service in relation to (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or [Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , logo or house mark of a business entity by appearing in advertisement and promotional event or carrying out any promotional activity for such goods, service or event. Explanation. - For the purposes of this sub-clause, 'brand' includes symbol, monogram, label, signature or invented words which indicate connection with the said goods, service, event or business entity; 9.1 From perusal of the above clause, it is clear that for covering a service under this clause - (a) the service should have been provided or is to be provided to any person by any other person either through business entity or otherwise under a contract ; (b) the contract is for promotion or marketing of a brand of goods, service event or for endorsement of name, including a trade name, logo or house mark of a business entity ; and (c) the service has been provided by the service provider either by appearing in advertisement and promotional events or by carrying any promotional activity for such goods, service or events. 9.2. Brand endorsement is a form of brand p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received consideration at the rate specified in the contracts. 12. We do not agree with the above contention of the Department, for the following reasons :- (a) While Business Auxiliary Service in terms of its definition in Section 65 (19), covers among other activities, the services in relation to promotion or marketing or sale of the goods produced or provided by or belonging to the client or promotion or marketing of services provided by the client, Section 65 (105) (zzzzq) covers the promotion or marketing of the brand name/trade name of the client, which may be of more than one product (b) From the wordings of Clause (zzzzq) of Section 65 (105), it is clear that the services of brand promotion covered under this Clause are those which are provided by the service provider in terms of a contract for promotion or marketing of brand of goods, services or event or endorsement of trade name, logo or house mark of a business entity by appearing in advertisement and promotional events or by carrying out any promotional activity for such goods services or events. In the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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