COMMISSIONER OF CENTRAL EXCISE Vs. TEAM UPD LTD.

JUDGEMENT

(1.) Examined the records and heard both sides. It appears from the records that, during the period January, 1997 to March, 2002, the respondents had leased out their site at Trisoolam, Chennai to two parties, namely, M/s. Pepsico India Holdings Pvt. Ltd. (hereinafter referred to as PEPSICO) and M/s. Laqshya Media (P) Ltd. (hereinafter referred to as LAQSHYA) for display of their advertisements. They had collected Rs. 8,37,734/ - and Rs. 11,47,500/ - towards rental from PEPSICO and LAQSHYA respectively. The department demanded service tax on these amounts from the respondents by treating them as Advertising Agency. These demands were contested. The original authority confirmed these demands against the assessee. An appeal was preferred to the Commissioner (Appeals) and the same was allowed. Hence the present appeal of the Revenue.

(2.) Ld. SDR reiterates the grounds of this appeal and submits that the decision of the Commissioner (Appeals) based on the Board's Circular No. 341/43/96 -TRU, dated 31.10.96 is not correct in view of the Tribunal's decision in Zee Telefilms Ltd. v. CCE Mumbai . On the other hand Id. Counsel for the respondents argues in defence of the impugned order by relying on Trade Notice No. 99/GL/90/CE/PRO/CAL -II/99, dated 16.9.99 of the Calcutta Central Excise Commissionerate as well as the following case law:

(3.) After examining the records carefully, I find that the challenge in this appeal of the Revenue is only in respect of the service tax on the rent received by the assessee from PEPSICO. There seems to be no challenge in relation to LAQSHYA. In this background, I have perused the terms of the relevant lease agreement between the respondents and PEPSICO, available on record. Under this agreement, the respondents received US 40,000 per annum towards rental for the aforementioned advertisement site. Another noteworthy condition of this agreement reads as under: