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TMI Blog2024 (2) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... The words selling of space or time slots for advertisement are not defined in the act therefore, the meaning of these words is to be understood in commercial parlance which means providing space for displaying advertisement. At the time of introduction of new service, the Joint Secretary, Ministry of Finance, Department of Revenue, Government of India issued a clarification on this service vide D.O.F. 334/4/2006-TRU dated 28.02.2006 which shows that advertisement on building covers under the scope of sale of advertising spaces. The customer or client approaches the appellant with advertisement material and the appellant displayed the same on a space for a particular period and charge the customer on monthly basis. After expiry of the period the advertisement is removed. Such activities of providing space for displaying advertisement was covered in the Negative list and as such not taxable. It is evident from the details given in above invoices that the Appellant was not engaged in designing and conceptualising advertisement. The Tribunal has observed in the case of Zodiac Advertisers [ 2006 (3) TMI 138 - CESTAT, BANGALORE ] that a service is covered under Advertising Agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warding agencies for a specified period. The nature and module of the business of the Appellant was that they allowed different clients to display advertisement on pre-assigned space of the structure constructed by M/s Chirag Impex on rental basis. The consideration from clients was charged on the basis of time period for displaying the advertisement, site of advertisement, location, area of space etc. The advertisement material such as flex banner were printed by the clients itself. The Appellant was never engaged in printing flex banners for displaying the advertisements on such pre-assigned spaces. The services provided by the Appellant were restricted only to selling of space for the advertisements and only in some cases ancilliary activities like mounting and installation of printed material provided by clients were placed on the hoardings/Bill boards. The Appellant maintained the hoardings/bill boards etc. so that the wear and tear of the structure could be taken care of from time to time. Electricity was arranged by the Appellant making the advertisement visible at night at it s own cost and expenditure. No separate consideration was charged for maintenance and electrificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category of Advertisement Agency for the period 01.10.2012 to 30.09.2015 under the proviso to Section 73(1) of the Finance Act, 1994 read with section 174 of the Central Goods Services Tax Act, 2017 along with interest and also appropriation of the amount already deposited by the Appellant against the demand to be recovered from the Appellant. Besides demand, penalty under section 78 of the Finance Act,1994 and Late Fee for filing ST-3 late were also proposed. Penalty was also proposed on the partner, Shri Sanjay Adhlakha 4. The Appellant contested the Show Cause Notice and clarified that services rendered by them were Selling of Space only. The Appellant was not carrying out any activities in relation to creation of advertisement. The Appellant did not have any role in preparation of advertisement. It was also clarified that the demand was barred by limitation as nothing was suppressed and invocation of extended period was not sustainable. 5. The Show Cause Notice was adjudicated by the Principal Commissioner, CGST, Noida vide the impugned order and the following order was passed:- (i) Confirmed the demand of Rs.7,50,17,841/- against the Appellant for the period fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Negative List . However, there was statutory definition of Advertisement Agency prior to 1.7.12 in Section 65(3) of the Finance Act,1994 on the basis of which, the activity of the Appellant was classified under the category of Advertisement Agency . It was also submitted that no evidence was adduced by the department to show that the Appellant was engaged in making or preparing or advising for advertisement which was an essential element for classifying the activity under Advertisement Agency . The amount on which service tax was demanded pertains to displaying of advertisement through hoarding, bill board etc. Learned counsel further submitted that charges were collected from clients only for display through hoarding for a certain period as mentioned in the invoices. From the nature of invoices, it is evident that the consideration was in the form of rental charges for space provided for displaying the advertisement. There was no charge for any other activities as per the invoices. Display of advertisement on some specified place was exempted from service tax because of entry of Selling of Space for Advertisement under Section 66D (g) in Negative List. The customer or cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the demand under the proviso to Section 73(1) of the Finance Act, 1994 has wrongly been raised against the Appellant. Therefore, the penalty imposed under Section 78 is also unwarranted. It is submitted that the penalty under Section 78 can be imposed only in the cases where the elements of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of Chapter V of the Finance Act, 1994 or the Rules made thereunder, with intent to evade payment of service tax are present. It may be seen that no ingredient of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of Chapter V of the Finance Act, 1994 or the Rules made thereunder with intent to evade payment of service tax are available in this case. Therefore, penalty under Section 78 of the Finance Act, 1994 cannot be imposed on the Appellant. Moreover, the value of the services was duly declared in the ST-3 returns, hence there was no suppression on the part of the Appellant. He prayed that the Order-in-Original confirming the penalty under Section 78(1) of the Finance Act, 1994 be set aside. 10. The Appellant accepts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of Shri Sanjay Adhlakha and confirmed the demand of service tax for the period 01.10.2012 to 30.09.2014. It has been observed by the Adjudicating Authority that description of service in ST-2 certificate was Advertising Agency service and on that basis it was held that the Appellant provided Advertising Agency service. As regards description of services in ST-2 certificate, it is found that at Sl.No.7 in ST-1 application and at Sl.No.3 in ST-2 certificate, only taxable services were required to be declared. Non-taxable services rendered by a service provider were not required to be mentioned in the ST-1 application and ST- 2 certificate. Non-mentioning of Sale of Space for Advertisement service in ST-2 certificate of the Appellant does not indicate that the said service was not rendered by him. The observation of the Adjudicating Authority on the basis of description of service given in ST-2 that the Appellant was providing only Advertising Agency service is not maintainable. It has also been stated by the Adjudicating Authority that in ST-3 returns filed for the period from 01.07.12 to 30.09.14, the service description was shown as Advertising Agency service but no serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document/information required by them. Burden lies on the department to prove the allegation. It cannot be shifted on the Appellant. In this context, reliance is placed upon the following case laws wherein it has been established that the revenue has to establish on the basis of facts and circumstances from which a reasonable inference could be drawn that the assessee had attempted to evade tax. (i) The Hon ble Supreme Court in case of Sati Oil Udyog reported as (2015) 276 CTR 14 has held that :- The burden of proving that the assessee has so attempted to evade tax is on the revenue which may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it . (ii) The Hon ble Supreme Court in the case of Hindustan Ferodo Ltd. vs. Collector of Central Excise, Bombay, 1997(89) ELT 16(SC) held thus :- 3. It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within Item 22F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, that the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e list of Services specified under Section 66D (g). We find that the words selling of space or time slots for advertisement are not defined in the act therefore, the meaning of these words is to be understood in commercial parlance which means providing space for displaying advertisement. At the time of introduction of new service, the Joint Secretary, Ministry of Finance, Department of Revenue, Government of India issued a clarification on this service vide D.O.F. 334/4/2006-TRU dated 28.02.2006 which shows that advertisement on building covers under the scope of sale of advertising spaces. 15. The claim of the Appellant that services rendered by them were not chargeable to service tax as they were under the category of sale of space for advertisement which were in the Negative List as provided under Section 68(g) of the Finance Act, 1994 during the period 01.10.12 to 30.09.14 was rejected by the Adjudicating Authority without any proper ground. The Appellant got registration as service provider as Advertising Agency but he did not provide the said service from 01.10.2012. The Appellant had provided service of sale of space for advertisement which was not taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of selling of space for advertisement under Section 66D (g) in Negative List. The customer or client approaches the appellant with advertisement material and the appellant displayed the same on a space for a particular period and charge the customer on monthly basis. After expiry of the period the advertisement is removed. Such activities of providing space for displaying advertisement was covered in the Negative list and as such not taxable. It is evident from the details given in above invoices that the Appellant was not engaged in designing and conceptualising advertisement. So, they were not covered under the taxable services. In this context, reliance is placed on the decision of the Tribunal in the case of Shah Publicity, supra. In that case, the assessee was displaying advertisement on various structure by mounting hoarding , banners etc and was rent on monthly basis. The assessee was not paying service tax during the period 1.07.2012 to 30.09.2014 on the ground that the said service was selling of space for advertisement and was in Negative List during the period. The claim of the assessee was rejected and said service was declared to be taxable under Advertisement Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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