ZEE TELEFILMS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE two appeals are filed by M/s. Zee Telefilms Ltd. and M/s. Star India Pvt. Ltd. arising out of two separate Order -in -Appeals having common issue and as such are being taken up for hearing together. Both the appeals are posted today for hearing their Stay Applications for waiver of pre -deposit of Service Tax demanded from them and the equivalent amount of penalty imposed on them.

(2.) 1 Shri V. Laxmikumaran, learned Advocate submitted that both the Appellants are, inter alia, engaged in the business of acting as exclusive agent for foreign television channel to collect the dues from the customers of such channel in India; that M/s. Zee Telefilms had entered into agreement dated 1 -1 -1999 with M/s. Asia Today Ltd. and the other Appellants has entered into an agreement with M/s. Star Advertising Sales BV of Netherlands; that the duty and responsibility of the Appellants are for providing of information to the foreign companies regarding displays, arranging sale of advertising and sponsorship on the channels, collecting information relating to advertising client who wants to advertise their product on any of the channels, collecting advertisement from advertisers in India and despatch the same for broadcast to the channel, collecting payment from advertiser or advertising agency and convey the same to the foreign companies and for providing potential advertisers with information regarding advertising on any of the channels. He, further, submitted that the demand of Service tax has been confirmed against them by treating them as advertising agents; that as per Section 65(1) of the Finance Act, 1994 "advertisement" includes any notice, circular, label, wrapper, document, hoarding or any other audio or visual representation made by means of a light, sound, smoke or gas; that as per Section 65(2) of the Act "advertising agency" means any commercial concern engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes the advertisement consultant; that Clause (c) of Sub -section (48) of Section 65 defines taxable service as under:

(3.) OPPOSING the arguments Shri R.C. Sankhla, learned Senior Departmental Representative, submitted that the services rendered by both the appellants are in connection with the selling of advertisement from authorized advertising agency and advertiser for display or exhibition of these advertisement on Star TV/Zee TV Network; that they have been appointed by ATL/Star TV as their representative in India to sell TV advertisement; that they sell Television advertisement and collect and remit them; that they are performing various services such as obtaining the necessary RBI and other approval for effecting the remittance, maintaining the list of actual and potential clients with particulars and supplying copies of the same to the foreign companies on request; that duties and responsibilities of M/s. Zee TV Films also included collection of information relating to advertisers wanting to advertise their products and convey such details and information to ATL to enable them to sell advertisement and sponsorship on the channels and collect the, advertisement from advertisers in India; that they also provide potential advertisers with information regarding advertising on any of the channels; that in case of advertisers holdings Exchange Earners Foreign Current Account, M/s. Zee TV Films Ltd. also ensure that all advertisement materials, video tapes, cassettes with respect to such advertisements are directly despatched by advertiser to M/s. ATL; that they would also assist such advertiser in complying with any formalities required under the Indian Law and obtaining any applicable consents necessary to enable the advertiser to despatch the advertisements materials directly to M/s. ATL. Learned Senior Departmental Representative, contended that all these duties and responsibilities of the appellants clearly reveal that they are working as advertising consultant which is covered within the definition of advertising agency under Section 65(2) of the Finance Act, 1994 and as such they are liable to pay the Service tax.