MCCANN ERICKSON (INDIA) PVT. LTD. Vs. CST

JUDGEMENT

(1.) THIS appeal has been filed against order -in -original No. 5/RK/2006 dt. 15.2.2006 passed by Commissioner of Service Tax, Delhi.

(2.) THE appellants render taxable service under the category of "advertising agency service". They entered into contract with their clients for providing advertisement agency service. The appellants render advertising services to various clients in the form of creative agency wherein they create advertisement by themselves or their third party media agency wherein they do media printing and/or buying for advertisement to be published in print/electronic media. They were receiving 15% agency commission from authorized broadcasting and print media during the period April 2000 to March 2001. The appellants had passed on the above mentioned commission to their clients. The case of the department is that the appellants should have included the whole amount of commission received by them in the gross taxable value. Proceedings were initiated against the appellants for recovery of the differential service tax. The adjudicating authority confirmed the demand of service tax to the tune of Rs. 1,16,29,505/ - under Section 73 read with Section 78, 76 and 77 of the Finance Act 1944, read with Rule 6(1) of the Service Tax Rules. He demanded interest under Section 75. A penalty of Rs. 100/ - per day was imposed under Section 76 of the Act. Penalty of Rs. 1,16,29,505/ - was imposed under Section 78 of the Act for proposing the value of taxable services. Further, a penalty of Rs. 1,000/ - was imposed under Section 77 of the Act.

(3.) MS . Anita Rastogi, learned Advocate appeared on behalf of the appellants and Shri R.K. Verma, learned DR for the Revenue.