9911796707
TMI Blog2008 (5) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... & 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 advertisements for customers. Even though registration was taken for payment of service tax under compulsion, they refused to comply with the provisions of S. 68 of Finance Act read with R. 7 of Service Tax Rules in regard to filing of returns and payment of service tax. However, on enquiry, it was found that respondent was procurin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant 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 means of light, sound, smoke or gas." "S. 65(3) : Advertising Agency means any commercial concern engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant." In the adjudication order, the Deputy Commissioner has taken note of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or visual representation as stated under S. 65(2) of the Act, the adjudicating officer took the view that the product made by respondent for customer is advertisement as defined under S. 65(2) of the Act and consequently respondent is liable to pay service tax as an 'advertising agency' 5. The Tribunal has assumed that advertisement in all the cases is a creative work inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 agency" as defined under S. 65(3) of the Act. We notice that the Tribunal held in favour of respondent by holding that "to be called as an 'advertising agency', all the activities mentioned in the definition should be carried out by the person." We completely disagree with this view of the Tribunal because what is required in the definition clause to qualify an 'advertising a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escription 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 senior counsel appearing for the respondent relied on the Circular dated 16-8-1999, F. No. 345/4/97-TRU, issued by the Ministry of Finance granting exemption to the persons engaged in printing and publishing of telephone directories, yellow pages or business directories, we do not think such decision can apply to the respondent because respondent is admittedly engaged in production and sale of advertising materials only and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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