REX ADVERTISERS Vs. COMMISSIONER OF SERVICE TAX, BANGALORE

JUDGEMENT

(1.) This appeal has been filed against Order -in -Appeal No. 9/2005 -C.E., dated 31 -1 -2005 passed by the Commissioner of Central Excise (Appeals -II), Bangalore.

(2.) REVENUE proceeded against the appellants on the ground that they had failed to take registration as per Section 69 of the Finance Act 1994; that they had failed to pay service tax as applicable to the Central Government as per Section 68 read with Section 66 of the said Act and that they had failed to file prescribed returns as per Section 70 of the Act. The Asst. Commissioner confirmed the demand of Rs. 1,15,023/ - along with interest and imposed penalties under various sections of the Act. The appellants approached the Commissioner (Appeals) who confirmed the Order of the Original Authority. The main contention of the appellants is that they (M/s. Rex Advertisers) are only a procurement agency functioning on behalf of M/s. Empire Publicity Service to procure hoardings space. Further, they contended that there is no separate entity as M/s. Rex Advertisers and all bills with regard to advertisements are raised by M/s. Empire Publicity Service only and they are accounted in the books of M/s. Empire Publicity Service. Moreover, M/s. Empire Publicity Service are registered under Service Tax and their bills are inclusive of advertisement tax. The Advertisement Tax is paid to Bangalore Mahanagar Palike (BMP) by M/s. Rex Advertisers. The same was included in the taxable value for purpose of discharging Service Tax by M/s. Empire Publicity Service and hence, the question of payment of Service Tax again does not arise.

(3.) SHRI R. Raghuraman, learned advocate appeared for the appellants and Shri K. S. Reddy, JDR for the Revenue. The learned advocate submitted that the appellants are merely hiring advertisement space and for that purpose, they are paying tax to Bangalore Mahanagar Palike; the mere act of hiring advertisement space does not amount to taxable service under the category of Advertising Agency for the purposes of payment of Service Tax under the Finance Act 1994. It was also contended that the amount of Rs. 23,00,454/ - paid to BMP has already suffered Service Tax at the hands of the principal company M/s. Empire Publicity Service. He relied on Board's Circular No. 64/13/2003 dated 28 -10 -2003 and also on the following case laws.