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TMI Blog2008 (5) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... ri M. Pathrose Mathai, Sr. Advocate, Ms. Chandini G. Nair, E.M. Joseph and Ms. Radhika Rajasekharan, for the Respondent. [Order per: C.N. Ramachandran Nair, J.]. - This is an appeal filed by the Commissioner of Central Excise under S. 35(G) of the Central Excise Act challenging the order of the Customs, Excise & Service Tax Appellate Tribunal cancelling demand of service tax raised on the respondent confirmed in first appeal by Commissioner (Appeals). Respondent's appeal was allowed by the Tribunal by holding that they are not an "advertising agency" as defined under S. 65(3) of the Finance Act, 1994. The facts leading to the case are the following:- Respondent is engaged in the business of making and selling of advertisemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal filed against the adjudication order is dismissed by the Commissioner (Appeals), the second appeal filed by the respondent is allowed by the CESTAT. It is against this order, the Commissioner of Central Excise has filed this appeal. 2. We have heard Shri. P. Parameswaran Nair, Asst. Solicitor General appearing for appellant and senior advocate Shri Pathrose Mathai appearing for respondent. 3. Since the question involved has to be considered with reference to the definition clauses contained in S. 65(2) and (3) of the Finance Act, 1994, the same are extracted hereunder for easy reference. "S. 65(2) : Advertisement includes any notice, circular, label, wrapper, document, hoarding or any other audio or visual representation made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng agency" under the above definition clause. Advertisement is given an inclusive definition and it is, any notice, circular, label, wrapper, document, hoarding or any other audio or visual representation made by light, sound, smoke or gas. Admittedly, respondent is engaged in printing and making of advertising materials with the name, product name, logo or trade name, etc. of the customer with or without design work, and the advertising board or banner or sticker or box so made is supplied to the customer for display. Besides this, respondent is making advertising materials like PVC balloons, display stands, cinema slides etc. Since these items squarely come within the meaning of label, wrapper, document, hoarding or any other audio o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entire comprehensive activities of making of the material and display of the same. In fact, repetitive use of same advertising material is also advertisement. We have already noticed that advertisement by showcasing or publication or display of product name, logo, manufacturer's name etc. is very common. We find the definition is an inclusive one, wide enough to cover anything independently referred to therein. Therefore, we are of the view that the making and sate of advertising materials for customers in the form of banner or hoarding or film-slide, etc. is 'advertisement' as defined under S. 65(2) of the Act. 6. The next question to be considered is whether the respondent answers the description of an "advertising age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in advertisement only will attract liability. We are of the view that all commercial concerns engaged in any of the activities connected with advertisement, which includes making, preparation, displaying or exhibition of advertisement, answer the description of 'advertising agency'. In other words, all activities referred to in definition clauses need not be carried out by the commercial concern to answer the description of 'advertising agency'. Since respondent is admittedly engaged in production and sale of advertisements with the materials referred above, based on customer's orders, the Assessing Officer rightly held respondent to be liable to pay service tax as an 'advertising agency". Even though learned se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases and sales before the adjudicating officer for re-fixation of turnover and liability. Since respondent succeeded, at least at the Tribunal stage, we feel it is a fit case to cancel the penalty. However, cancellation of penalty will be on condition that 'the respondent will make payment of tax with applicable rate of interest within the time granted by the adjudicating officer, The adjudicating officer is, accordingly, directed to refix liability and revoke the penalty, if respondent co-operates with the Department by producing records and remitting the tax within the time granted by the Officer for payment. If respondent does not produce records within the time granted above, original demand including penalty will stand sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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