Commissioner Of Service Tax vs Mumbai
- CitationAppeal No. ST/423, 467/11
Ratio decidendi
The rule this decision rests on
The incentive discount received by a media-buying agency from media companies, being an amount relating to the media companies' own business promotion expenses, is not consideration for a taxable service, and so service tax cannot be demanded on it where the Tribunal has already held in comparable cases (P. Gautam & Co., Grey Worldwide) that such receipts fall outside the service tax levy and that the same ratio applies to the present assessee. Because the Tribunal has so held, the confirmed demand of service tax, interest and penalty under Section 78 of the Finance Act, 1994 on such incentive discounts cannot be sustained and must be set aside; the Revenue's appeal seeking penalty under Section 76 fails with it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I
Appeal No. ST/423, 467/11
(Arising out of Order-in-Original No. 02/STC-I/BR/11-12 dated 21.04.2011 passed by Commissioner of Service Tax, Mumbai)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)
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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Commissioner of Service Tax Appellant Mumbai (in Appeal No. ST/423/11) v. M/s RMG Connect Respondent M/s RMG Connect Appellant Appellant (in Appeal No. ST/467/11)
v.
Commissioner of Service Tax Respondent Mumbai
Respondent Appearance: Shri A.B. Kulgod, Asst. Commissioner (AR) for appellant Shri Harish Bindu Madhavan, Advocate for respondent
CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)
Date of Hearing: 18.08.2015 Date of Decision: 18.08.2015
ORDER NO
Per: M.V. Ravindran
These two appeals are filed by Revenue as well as by assessee-appellant against Order-in-Original No. 02/STC-I/BR/11-12 dated 21.04.2011.
2. Heard both sides and perused the records.
3. The issue involved in this case is non-payment of service tax on an amount received by the appellant-assessee as incentive discount from media companies. The appellant-assessee is aggrieved by the impugned order which confirmed the demand of service tax along with interest and imposition of penalty under Section 78 of the Finance Act, 1994 while the Revenue is aggrieved by the order on the ground that the adjudicating authority has not imposed any penalty under Section 76 of the above said Act.
4. Learned Counsel would submit that identical issue came up before this Bench in the case of Group M Media India Pvt. Ltd. and Ors. and was disposed of by a final order No. A/1421-1431/14/CSTB/C-I dated 27.08.2014 in favour of the appellant therein and produces copy of the same.
5. Learned D.R. reiterated the findings of the lower authorities and also submits that penalty should have been imposed under Section 76 of the Finance Act, 1994.
6. On consideration of the submissions made by both sides, we find that the adjudicating authority has clearly recorded that the issue involved in this case is whether the service tax on an amount received as incentive discount is sustainable or otherwise. The said incentive discount is received by the appellant-assessee from the media companies which pertains to business promotion expenses of the Media Cos. We find strong force in the submission made by the learned Counsel that the issue is squarely settled in favour of the appellant-assessee by our final order dated 27.08.2014 (supra) which we reproduce:-
5. In view of the fact that the Tribunal in the case of Grey Worldwide (I) Pvt. Ltd. Case, cited supra, has already held that the service tax demands on these receipts are not sustainable, in the present case also, the same ratio has to be applied. Accordingly, we set aside the demands confirmed against the assessee-appellants M/s. Group M Media India Pvt. Ltd. And M/s. Lintas India Pvt. Ltd. And allow the appeals filed by them. The appeals filed by the Revenue are rejected. Cross-objections are also accordingly disposed of.
7. The above said ratio was first held by the Tribunal in the case of P. Gautam & Co. v. CST 2011 (24) STR 447 (Tri. Ahmd.) and followed in the case of Grey Worldwide (I) Pvt. Ltd. V. CST 2015 (37) 597 (Tri. Mumbai). Accordingly, the impugned order which confirms the demand against the assessee-appellant is unsustainable and liable to be set aside and we do so.
8. The appeal filed by the assessee-appellant is allowed and the appeal filed by the Revenue is rejected. (Dictated in Court)
(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)
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Appeal No. ST/423, 467/11
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