1. After examining the records and hearing both sides, we note that the appellants pray for waiver of predeposit and stay of recovery in respect of an amount of service tax of over Rs. 53 lakhs as also in respect of penalties imposed on them by the Commissioner. The demand is for the period January, 2002 to April, 2006 and in the category of "Advertising Agency's Service" covered by Section 65(3) of the Finance Act, 1994. The demand is on the gross amount collected by the appellants from various clients for the service of providing space and time for display of advertisements in various parts of the premises of Satyam Cinema Theatre Complex, Chennai. The subject advertisements were displayed in motion pictures, cinema tickets, hoardings and other parts of the theatre premises. The appellants have been paying service tax in relation to 'sale of space or time for advertisement' after 01.05.2006, the date on which this activity was recognised as taxable service and introduced as such in the Finance Act, 1994. Admittedly, the impugned demand is for the same service rendered to their clients for a period prior to 01.05.2006. The Revenue has reckoned such activity as an "Advertising Agency's Service" covered by Section 65(3) ibid. It is the case of the appellants that, as the definition of 'Advertising Agency' did not undergo any change with the introduction of the taxable service of 'sale of space or time for advertisement' (01.05.2006), the appellants cannot be held to have rendered the taxable service of 'Advertising Agency' during the period of dispute. In other words, according to the appellants, the category of taxable service 'sale of space or time for advertisement' is not to be held to be a part of "Advertising Agency's Service". In this connection, learned Counsel has relied on a decision of this Bench viz. Commissioner of Central Excise, Chennai v. Sundaram Finance Ltd. 2007 (7) S.T.R. 55 (Tri.-Chennai), wherein a demand of service tax on the assessee in the category of "Management Consultancy" for a period prior to 01.07.2003 was set aside after observing that the service actually rendered by them came within the scope of "Business Auxiliary Services" introduced with effect from 01.07.2003 and that, as the definition of "Management Consultancy" was not altered simultaneously with the introduction of "Business Auxiliary Services", the services in question would not get covered under the ambit of "Management Consultancy". Learned Counsel has invoked this principle to resist the impugned demand of service tax and we have found substance therein.
2. Learned SDR has, on the other hand, relied on a decision of this Tribunal in the case of Prithvi Associates v. Commissioner of Central Excise, Mumbai 2006 (1) S.T.R. 32 (Tri.-Mumbai), wherein certain services rendered to Government departments by the assessee were held to be covered by the definition of 'Advertising Agency' for the period 1997-98 to 2001-02. The view taken by the Tribunal in the cited case was that service of an Advertising Agency also includes 'any service connected with display or exhibition of advertisements, apart from service connected with the making or preparation of advertisements'. We note that, in the case of Prithvi Associates (supra), it was also noted by the Bench that the expenses for making space available for display of advertisement were not includible in the value of taxable service.
It is also noted that the principle invoked by the learned Counsel today was not invoked before the Bench in the case of Prithvi Associates (supra).
In the result, the appellants have prima facie case against the impugned demand. Accordingly, there will be waiver of predeposit and stay of recovery in respect of the amounts of service tax, education cess and penalties.