Customs, Excise and Gold Tribunal - Delhi
Star Neon Singh vs Commissioner Of Central Excise, ... on 20 February, 2002
Equivalent citations: 2002ECR226(TRI.-DELHI), 2002(141)ELT770(TRI-DEL), 2006[2]S.T.R.588, [2007]7STT223
ORDER S.S. Kang, Member (J)
1. The appellants filed these appeals against the orders-in-appeal passed by the Commissioner (Appeals).
2. The appellants are manufacturing NEON light sign boards. The proceedings in Appeal No. ST/1/2001-D started with the issuance of show cause notice to the appellants for getting themselves registered under the provisions of Service Tax Act, 1994 on the ground that the appellants are providing taxable service known as advertising service. The adjudicating authority directed the appellants to comply with the necessary requirement of service tax including themselves registered, filing quarterly returns and payment of service tax timely including the pending payments. The appeal filed by the appellants was rejected by the Commissioner (Appeals).
3. The proceedings in Appeal No. ST/20/2001-D were initiated with the issuance of show cause notice to the appellants for not filing the returns from Jan., 97 to Oct., 98 under the provisions of Service Tax Act for imposition of penalty of Rs. 5,36,800.00. The adjudicating authority confirmed the show cause notice and the appeal filed by the appellants was dismissed by the Commissioner (Appeals).
4. Heard both sides.
5. The contention of the appellants is that they are not covered under the definition of advertising agency because they do not render any service to their customers nor enter into any contract for providing any service with their customers. They are only preparing the sign boards and charge sale price in lump sum.
6. In respect of penalty, their submission is that under bona fide belief that they are not covered under the Act, therefore, they had not filed the necessary returns and Section 80 of the Act provides that no penalty shall be imposable on the assessee for any failure if the assessee proves that there was reasonable cause for the said failure.
7. We find that the term 'advertising agency' is defined in the Act and as per the definition the advertising agency is to meet any commercial concerned engaged in providing any service connecting with the mail, preparation, display or exhibition and advertising and includes advertising consultant. The appellants are only manufacturing the sign boards as per the requirements of their customers. Such an activity cannot be held to be advertising agency as the appellants are not rendering any advertising service. The person like the appellants cannot be called as advertising agency as they are only writing or preparing the sign boards at the behest of their customers. There is no evidence on record to show the relationship between the customers and the appellant is of advertising agent which is necessary for imposition of service tax.
8. The Commissioner (Appeals) in the impugned order, while imposing a penalty had not considered the provisions of Section 80 of the Act which provides that no penalty shall be imposable on the assessee if the assessee proves that there is reasonable cause for the failure to file the returns. In the present case, as the appellants were not considering themselves as advertising agency under bona fide belief, the provisions of Section 80 of the Act are relevant. In these circumstances, we find that whole issue requires reconsideration by the adjudicating authority. Therefore, the impugned order is set aside and the appeals are allowed by way of remand.