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PJ/CASE LAW/13-14/2069

Whether charges for publishing advertisement in the print media is includible in taxable value of service?
Case:- EVEREST BRAND SOLUTION PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI

Citation:-  2013 (32) S.T.R. 216 (Tri.-Del.)

Brief facts:- The dispute in the present appeal relates to the inclusion or other­wise of such charges in the assessable value of the services provided by the ap­pellant. Here the appellantis an advertising agency and is discharging his service tax liability on the consideration of services received by him. In addition, they also sold the space in print media or electronic media for display of advertisement. The print media or electronic media grant slots/space to the appellant for the purpose of displaying the advertisement. Such charges are recovered by the appellant from their cus­tomers and paid the same to the media.
 
Appellant’s contention:- The counsel for the appellant places reliance on the Board Circular no. 341/43/96-TRU dated 31.10.1996 wherein the amount paid by the advertising agency for space and time in getting the advertisement published in the print media or electronic media is not includible in the assessable value for the purpose of levy of service tax.  

Respondent’s contention:-The Respondentinsists on reference to Tribunal's Order No. 56155/2013, dated 5-2-2013 in the case of Sep-con India Pvt. Ltd.

Reasoning of Judgment:-After considering the submission, The Tribunal had concluded in terms of the Board's Circular No. 341/43/96-TRU, dated 31-10-1996, amount paid by the advertisement agency for space and time and in getting the advertisement published in the print media or electronic media will not be included in the value of the taxable services for the purpose of levy of service tax. Admittedly, such circulars are binding on the de­partmental authorities. Though the respondent insisted on the Order No. 56155/2013, dated 5-2-2013 in the case of Sep-con India Pvt. Ltd., the tribunal noted that the issue involved in the case was not the subject matter of the above referred order of the Tribunal inasmuch as the stay order made it clear that question was relatable to assessable value being split into two parts and one such part was called reimbursement of expenses. Inasmuch the present issue was not the subject matter of the earlier stay order we find that the learned DR reliance on the same is uncalled for and not warranted. The tribunal further noted that the Hon'ble Madras High Court in the case of Adwise Advertising Pvt. Ltd. v. Union of India [2006 (2) S.T.R. 375 (Mad.) = 2001 (131) E.L.T. 529 (Mad.)] has observed that the amount spent for flashing an advertisement in a particular print media or electronic media, cannot be said to have been paid towards the services rendered by the advertising agency. As such, we find that prima facie, the issue stands covered in favour of the assessee, thus entitling them to unconditional stay. We order accordingly.

Decision:- Stay granted.

Comment:-The essence of case is that in view of the Board Circular, the charges paid by the advertising agency for sale of space and time and getting the advertisement published in the print media is not includible in the taxable value of service for the purpose of service tax. As such, the stay application was allowed. 

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