ZODIAC ADVERTISERS Vs. COMMISSIONER OF CENTRAL EXCISE, COCHIN

JUDGEMENT

(1.) THIS appeal has been filed against the O -I -A No. 22/2003 -S.T., dated 31 -3 -2003 passed by the Commissioner of Customs and Central Excise (Appeals), Cochin.

(2.) THE appellants M/s. Zodiac Advertisers, Cochin are engaged in the manufacture of Screen Printed Materials. They had obtained registration as a small scale unit from the District Industries Centre, Ernakulam for printing of stickers, labels, visiting cards, etc., using raw materials such as paper, gum, card, ink, plastic sheet, aluminium sheet and C.T. sheets. Revenue proceeded against the appellants on the ground that they were engaged in the business of running an advertisement agency and had not paid the Service Tax for the period from 1 -11 -1996 to 31 -03 -2001. The original authority confirmed the demand of Rs. 41,40,792/ - towards Service Tax payable for the above period. He imposed a penalty of Rs. 50,000/ - under Section 76 and Rs. 10,000/ - under Section 77 of the Finance Act, 1994 for failure to furnish the prescribed returns. Interest under Section 75 was also passed on the demand. The appellants challenged the original order before the Commissioner (Appeals). The Commissioner (Appeals) upheld the original order with the following observations in para 7 of the impugned order : - Under section 65(2) of the Finance Act, 1994, advertisement agency is any commercial concern engaged in providing any service with making, preparing, display or exhibition of advertisement. Further, advertisement is defined as one including any notice, circular, label, wrapper, document, hoarding or in any other audio or visual representation made by light, sound, smoke or gas. From the facts narrated earlier, it is seen that the appellants are engaged in screen printing and preparation of labels, documents, hoardings, visual representation, etc. Therefore, their activity would very much get covered by the term advertisement and they being by virtue of the scope of the definition, advertisement agency. I do not thus see any infirmity in the order of the lower authority in coming to such a conclusion. The appellants strongly challenge the above findings.

(3.) SHRI S. Raghu, the learned Advocate appeared for the appellants and Shri Ganesh Havanur, the learned SDR for the Revenue. The learned Advocate informed the Bench that the appellants are purchasing the required materials and carry out the activity of screen printing. Even though the appellants are known as M/s. Zodiac Advertisers, the name is a misnomer in the sense that the appellants are not advertisement agencies. In this connection, our attention was invited to Boards clarification reproduced in Trade Notice dated 16 -09 -1999 of the Calcutta Commissionerate wherein it has been clarified that persons engaged in the activity of compilation, printing and publishing of telephone directories, Yellow pages and business directories are not covered under the definition of advertising agency and accordingly are not liable to pay service tax. It has further been stated that if these persons also undertake any activity relating to making or preparation of an advertisement, such as designing, visualising, conceptualising, etc., then they will be liable to pay service tax on the charges made thereon. He pointed out that in the light of this clarification, the appellants are not liable for payment of service tax as they have not rendered any service of advertisement agency. Further, the learned Advocate relied on the following case -laws : -