By TIOL News Service

MUMBAI, FEBRUARY 22, 2015: THIS is a Revenue appeal filed in the year 2009.

The Adjudicating authority observed that the appellant is printing and publishing calendar 'KALDARSHIKA' on which there are advertisements and, therefore, services are provided which fall under category of 'sale of space for advertisement'. The period of dispute is November 2006 to November 2007.

Take a look at the relevant entry in section 65(105) of the FA, 1994 - Explanation 2 having been substituted by FA, 2007.

(zzzm) to any person, by any other person, in relation to sale of space or time for advertisement, in any manner; but does not include sale of space for advertisement in print media and sale of time slots by a broadcasting agency or organisation.

Explanation 1.-For the purposes of this sub-clause, "sale of space or time for advertisement" includes,-

(i) providing space or time, as the case may be, for display, advertising, showcasing of any product or service in video programmes, television programmes or motion pictures or music albums, or on billboards, public places, buildings, conveyances, cell phones, automated teller machines, internet;

(ii) selling of time slots on radio or television by a person, other than a broadcasting agency or organisation; and

(iii) aerial advertising.

[Explanation 2. - For the purposes of this sub-clause, "print media" means, -

(i) "newspaper" as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867; (25 of 1867)

(ii) "book" as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867, but does not include business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes;] (25 of 1867)

The word "book" is defined in the Press and Registration of Books Act, 1867 thus -

"Book" includes every volume, part or division of a volume, and pamphlet, in any language, and every sheet of music, map, chart or plan separately printed.

On appeal, the first appellate authority has set aside the Order in Original and allowed the appeal filed by the assessee.

The following is the reasoning given by the Commissioner(A) -

"9.7 The above said definition of the word 'book' as given in the Press and Registration of Books Act, 1867 [25 of 1867] is an "inclusive definition". The appellants have cited the following case laws to drive home their point that the above definition being an "inclusive" definition, it only seeks to widen its meaning and not limit it.

•  The State of Maharashtra vs. Labour Law Practitioner' Association & Ors - AIR 1998 SC 1233

•  Commissioner of Income Tax vs. G.R.Karthikeyan AIR 1993 SC 1671

•  Scientific Engineering House P. Ltd. vs. CIT - AIR 1986 SC 338

I endorse this contention of the appellants. It is well settled law that when the legislature uses the word "includes". It enlarges the meaning of the words occuring in the body of the statute.

"The word 'include' is generally used is interpretation clauses in order to enlarge the meaning of the words or phrases occuring in the body of the statute and when it is so used, these words or phrases must be construed as comprehending not only such thins as they signify according to their natural import but also those things which the interpretation clause declares that they shall include" (Reg. Dir. ESIC vs. High Land Coffee Works, AIR 1992 SC 129, 131)

9.8 There is thus no doubt that the word "book" occuring in clause 105(zzzm) of Section 65 of the Finance Act, 1994, has to be understood in the context of the extended definition given in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 (25 of 1867) and not in terms of any other definition in a dictionary or as understood in common parlance . Further, other provisions of the Press and Registration of Books Act, 1867 (25 of 1867) need not be gone into for the purpose of arriving at the conclusion as to whether or not a particular item can be considered as "book" for the limited purpose of Explanation 2 ibid. By virtue of the said definition, 'every sheet of music, map, chart or plan separately printed' should also be considered as "book". In the instant case, I find that "Kaldarshika" consists of sheets of printed material with tables/charts therein. On detailed examination of the facts of the case, it is my considered view that the appellant's publication "Kaldarshika" which consists of printed tables, charts etc. can be brought within the mischief of the term "book" under the aforesaid inclusive definition in sub-section (1) of section 1 ibid.

9.7 With effect from 01.06.2007, by virtue of an amendment to Explanation 2 ibid, the definition of 'book' excludes business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes. "Kaldarshika" published by the appellant certainly cannot be termed as a business directory, yellow pages or trade catalogue. Thus this exclusion clause also does not render the publication "Kaldarshika" ineligible to be considered as a book.

9.8 In view of the above, it is apparent that "Kaldarshika" published by the appellants is covered by the definition of the word "book" given in sub-section (1) of section 1 ibid and hence gets covered by the scope of the term "print media". Inasmuch as the sale of space to print media stands excluded from the purview of this taxable service in question, the entire demand raised by the department has no legs to stand. The demand is thus unsustainable and is liable to be set aside in toto. The question of levy of interest as well as penalty also does not arise as the demand itself does not survive."

As mentioned, Revenue is not pleased with this order and is before the Tribunal.

The AR adverted to the contents of section 65(105)(zzzm) and submitted that as per Explanation 2(ii) to the definition, the term 'book' excludes business directory, yellow pages and trade catalogues which are primarily meant for commercial purposes, and the calendar which are published by the appellant would fall under this category.

The respondent supported the detailed order of the Commissioner (A) and also submitted that what is published by them as KALDARSHIKA is nothing but an Almanac.

The Bench observed that the Commissioner(A) had called for the specimen copy of KALDARSHIKA and considered the articles printed on the same and came to the conclusion that it is a ready reckoner of all sorts of religious, cultural and historical events of the year; the tables and charts give ample information about the auspicious dates/times; details of solar/lunar eclipses etc., though it contained many advertisements printed on each and every page. Observing so, the lower appellate authority had held that KALDARSHIKA is covered by the definition of 'Book', the Bench noted.

After extracting the findings recorded by the Commissioner(A), the CESTAT observed -

"6. As against the factual finding as recorded by the first appellate authority, we find hat the revenue has not brought any material which is contrary to the facts as recorded by the first appellate authority. Be that as it may, we find that definition of 'Sale of space for advertisement' as relied by the Departmental Representative falling under Section 65(105)(zzzm) would not cover the product published by the appellant, as the said publication cannot be considered a calendar, but an Almanac, which gives reader a host of information in respect of religions, cultural and historical events, as also the panchang. We agree with the first appellate authority that the appellant's product KALDARSHIKA cannot be termed as a business directory, yellow pages or trade catalogue; hence it is to be held as 'book' to be covered under the explanation (2) to the definition of the 'Sale of Space for advertisement'."

Holding that the order of the Commissioner(A) is correct and legal and did not suffer from any infirmity, the Revenue appeal was rejected.

(See 2015-TIOL-375-CESTAT-MUM)