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TMI Blog2004 (8) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ommenced his business as a franchisee for M/s. Kasturi and Sons Ltd. in the year 1999. However, in January, 1998, similarly placed persons were contacted by the Department advising that they are required to pay the service tax after getting themselves registered under the category of Advertising Agency . On receipt of communication from them 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 as they do not render any taxable service under the category of advertising agency, nothing was heard from the Department. 4. But the Department called for certain details in October, 2002 and the Appellant furnished the same. 5. On 11th July, 2003 a show cause notice was issued alleging that the appellants are to take out a registration as a service tax provider under the category of advertising agency and pay the service tax. The Appellants replied stating that they are only engaged in space selling and they simply pass on the advertisement received from the advertisers to the publisher. The advertiser instead of direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 Appellant does 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 Appellant. Hence the service of the Appellant is clearly space selling or canvassing and not that of any advertising agency. They are therefore not liable to tax under the category of Advertising Agency . 10. In Para 19.4 of the impugned order after explaining the over all activities and infrastructure of the Appellant, the authority did not in any manner find that the Appellants undertook any activities like estimation of the space, negotiation of the price, the layout of the advertisement, etc. In the absence of any such activity being undertaken by the Appellants and there being no finding to the effect that the Appellants undertook any such activity, the Orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the sub-clause, which occurs first among the sub-clauses which equally merit consideration. 15. 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. 16. The recognition of the possibility of the service in question being covered under the category of Business Auxiliary Service would itself preclude the classification of the service as an advertising agency. 17. It is submitted that the services of an advertising agency continues taxable as before. No part of the advertising agency service has been now brought under the category of Business Auxiliary Service. It is the submission of the appellants that their service was never coming under the category of advertising agency. This is in view of the nature of the service being merely canvassing/space selling and not that of any advertising agency. 18. I have examined the case records and submissions. My impression is that the service of the Appellant is clearly a service prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the judgment of the Madras High Court. 22. 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 in the Hon ble Supreme Court in the case of Mittal Engineering reported in 1996 (88) E.L.T. 622 (S.C.). 23. I also find that in any case the quantification is also 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. 24. The Original Authority has justified the invoking of five year period by relying upon the decision of the Larger Bench of the Tribunal in the case of Nizam Sugar Factory v. CCE reported in 1999 (114) E.L.T. 429. He held that the mere knowledge on the part of the department does not take away the statutory period of five years provided in the law in issuing demand. This is a clear incorrect interpretation of the said decision. 25. In the case of Rubicon Steels reported in 2003 (153) E.L.T. 73, the Tribunal clearly held, after noting the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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