Activity Of Printing Advertisement Content On PVC Material Amount to "Manufacturing", No Service Tax Payable: CESTAT

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the service tax is not payable on the activity of printing advertisement content on PVC material.The two-member bench headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the activity of printing advertisement content on PVC material which results in printed PVC flex or PVC board would amount to manufacture.The respondent/assessee is in the business of "wide format printing." It has no role in conceptualization or in making or creating designs for advertisements to be printed for customers. The customers provide the "ready to print" advertisement content and the respondent undertakes the printing of the content on PVC material procured by the respondent from the open market. The respondent has no authority from the customers to make any changes since the scope of the activity is limited to printing. Thus, according to the respondent, it has no role in the "making of the advertisement".The department/appellant has issued a show cause notice to the respondent for recovery of service tax for the period April 2007 to March 2012.The assessee submitted that its activity does not involve any designing or conceptualization of the advertising content but is limited to printing as per the designs supplied by the customers. The appellant does not have any specialisation in the creation or conceptualization of design so as to be covered under the term "making of advertisement".The Commissioner dropped the proceedings initiated by the show cause notices.The department assailed the order passed by the Commissioner of Customs, Central Excise and Service Tax, Hyderabad, by which the proceedings initiated by show cause notices have been dropped.The department contended that with respect to the bills raised by the respondent, the consumers are deducting TDS, which clearly indicates that the activity undertaken by the appellant is a service. The respondents have not discharged VAT on merit but only under a composition scheme.The assessee contended that the activity of printing "ready to print" advertisements on PVC flex material and the sale of printed material amounts to the sale of goods but not a service. Hence, no service tax is payable on the said activity under the "advertising agency" service.According to the assessee, a person is considered an "advertising agency" if he is engaged in providing any service related to the creation, preparation, display, or exhibition of an advertisement. The activity of the respondent is the printing of "ready to print" advertisement content on PVC material and the sale of the same to customers. The plea of the department that the same would come under the ambit of an "advertising agency" is not correct.The issue raised was whether the activities of "wide format printing" and "supply of advertising material to clients" based on the designs provided by the clients would amount to rendering any service.The CESTAT upheld the order of the commissioner and stated that the printing activity would not be subjected to the levy of service tax.Case Title: Commissioner of Central Excise Versus Macro Media Digital Imaging Pvt. Ltd.Citation: Service Tax Appeal No. 23542 Of 2014Date: 14.09.2022Counsel For Appellant: Authorised Representative V.R. Pavan KumarCounsel For Respondent: Advocate S. ThirumalaiClick Here To Read Order

Activity Of Printing Advertisement Content On PVC Material Amount to "Manufacturing", No Service Tax Payable: CESTAT

Mariya Paliwala

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Activity Of Printing Advertisement Content On PVC Material Amount to "Manufacturing", No Service Tax Payable: CESTAT

Mariya Paliwala

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers