COMMISSIONER OF SERVICE TAX Vs. ELEGANT PUBLICITIES

JUDGEMENT

(1.) THE show -cause notice issued to the assessees proposing recovery of service tax together with interest on scanning charges and publicity material charges collected from customers during the period 1999 -2001 on the basis that this fell under the definition of "Advertising Agency Services" was adjudicated by the Asstt. Commissioner confirming the demand by applying the extended period of limitation and imposing a penalty under Section 76 and Section 78 of the Finance Act, 1994. The demand and penalty were set aside by the Commissioner (Appeals) who accepted the contention of the assessees that they were only engaged in sale of publicity materials and were collecting scanning charges which was also not done by them and, therefore, the activity carried out by them could not be construed as carrying out of advertising agency service. Hence this appeal by the Revenue.

(2.) I have heard both sides. It has been the consistent stand of the assessees that they are not preparing or visualizing or conceptualizing the publicity materials but only purchasing publicity materials and selling them and also paying sales tax on such materials. It is also their stand that scanning does not come within the purview of the definition of "advertising agency service" which definition is as under: