TMI Blog2022 (9) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... these services. The denial of the credit on the invoices of M/s Group M Media India Pvt. Ltd, taken along with the invoices of the Broadcasters, is not justified. There are no substance in the manner in which Commissioner has sought to distinguish the case of Zapak [ 2018 (9) TMI 759 - BOMBAY HIGH COURT ]. On perusal of the sample invoices it is already concluded that the name of the appellant appear as client (service recipient) on the invoices issued by the Broadcaster, that being it is held that M/s. Group M Media India Pvt Ltd., is pure agent in the provision of the service. Commissioner has not recorded any finding in this order to the contrary. Since it is held in favour of the appellant on merits itself, no findings are recorded on the issue of interest, limitation and penalties. Appeal allowed. - Excise Appeal No. 85186 of 2016, Excise Appeal No. 87544 of 2016 and Excise Appeal No. 87801 of 2019 - FINAL ORDER NO. A/85889-85891/2022 - Dated:- 27-9-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND MR. AJAY SHARMA, MEMBER (JUDICIAL) Shri Gajendra Jain with Shri Rajesh Ostwal, Advocates, for the Appellant Shri Sydney D Silva, Additional Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responding invoices raised by TV channels. 2.4.1 The appellants made payment of the amounts/charges mentioned in the aforesaid two types of invoices raised by GMIPL and took CENVAT credit of the service tax paid by them. 2.5 Revenue was of the view that invoices of GMIPL are not valid documents for taking credit as they do not pay the service tax after taking credit of the tax paid by the broadcaster. Revenue also objected to credit of Rs.18,54,966/- taken by the Appellants as the invoices against which the credit was taken were raised on godowns, offices C F agents, for the reason that these places do not have ISD registration and the invoices bear the address of Head Office. 2.6 According to the department, the appellants suppressed the fact of availment of aforesaid input service credit from the department with intent to avail inadmissible credit and utilize the same for payment of excise duty on the final product. According revenue after undertaking the investigations issued show cause notice dated 30.04.2015 asking the appellants to show cause as to why: (a) the wrongly availed CENVAT credit totally amounting to Rs 23,80,16,095/- (Rs 23,61,61,129/- as detailed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the name of the appellants name as the client i.e. the recipient of the broadcasting service; All the relevant particulars are mentioned in the invoices. Therefore, there is no irregularity in the invoices in question and the invoices comply with the requirements of Rule 4A of Service Tax Rules, 1994. The practice of taking cenvat credit on broadcasting service is backed by the contractual agreement between the appellants and GMIPL. This is also the practice prevalent in the industry. Issue is squarely covered in Hon'ble Tribunal in Zapak Digital Entertainment Ltd.[2017 (49) STR 455 (T)], which has been affirmed by the Hon'ble Bombay High Court as reported at 2018 (9) TMI 759. For this they also rely on the following decisions: Indian Oil Corpn Ltd. [2014-TIOL-1246-CESTAT- MUM] PeakatanaPvt. Ltd. [2018 (9) TMI 1136-CESTAT CHENNAI] Career Point Info Systems Ltd. [2019 (2) TMT 768-CESTAT New Delhi Power Soap Ltd. [2018(7) TMI 254 - CESTAT CHENNAI] Jyoti Laboratories Ltd. [2015(11) TMI 1556 - CESTAT CHENNAI] Ultratech Cement Ltd. [2017(11) TMI 152 - CESTAT CHENNAI] No proceeding has been initiated by the service tax department aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed representative while reiterating the findings in the impugned order submits:- The Appellants have not correctly taken Cenvat Credit of Service Tax paid: Group M Media India Pvt. Ltd (GMMIPL), a service provider of the Appellants is not availing any credit of input services availed for providing services to the Appellants. Also they are neither paying service tax shown in their invoices through GAR/ challan nor paying by utilizing credit availed. NO evidence to that effect has been found submitted by the Appellants. Further in their written submission the Appellants have stated that, they are not required enquire whether Group M Media India Pvt., is discharging Service Tax or not. Rule 9(5) of the Cenvat Credit Rules, 2004, is very much clear that the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacture or provider of output services taking such credit. It is the responsibility of the Appellants to ensure as to whether Group M Media India Pvt., has discharged service tax liability in his capacity of service provider before taking cenvat credit of service tax paid on advertising services. Even though the Appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent Show Cause cum Demand notice, following two allegations are made; i) The assessee has appointed M/s. Group M Media India Pvt. Ltd. for rendering advertising service, Said advertisers have a group company called M/s. Result India Communication Pvt. Ltd., who obtains services from various TV channels for broadcasting advertisement of Kellogg products. The said TV channels pay service tax and issue service taxable invoices in the name of M/s Result India Communication Pvt. Ltd. It has been observed that the assessee avails CENVAT credit on input services on the strength of invoices issued by M/s Group M Media India Pvt. Ltd. The said invoices appeared to be compilation of bills raised by Channels raised in the name of M/s Result India Communication Pvt. Ltd. On enquiry with M/s Group M Media India Pvt. Ltd., it was revealed that they are not availing any credit of input services availed for providing services to the assessee. It was also submitted by then that they are neither paying service tax shown in their invoices through GAR 7 challan nor paying by utilizing credit availed. As such it appeared that invoices raised by M/s Group M Media India Pvt. Ltd are not valid docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice provided and shall be included in the value for the purpose of charging service tax on the said service, Therefore, in die instant case, the Service Provider with whom the assessee has made a contract, viz., M/s Group M Media India Pvt. Ltd., are liable to pay service tax on the gross amount charged from client in respect of the advertising agency services rendered. However, Group M Media India Pvt. Lid, shall be eligible to take credit of the service tax paid on input service used in relation to the provision of this output service. 26. However, I find in the instant case that, Group M Media India Pvt. Lid, a service provider of the assessee are not availing any credit of input services availed for providing services to the assessee, Also they are neither paying service tax shown in their invoices through GAR 7 challan nor paying by utilizing credit availed. No evidence to that effect has been found submitted by the assessee in their defence on record. Further, in their written submission the assessee has stated that, they are not required to enquire whether Group M Media India Pvt., is discharging Service Tax or not. I do not find any merit in the assessee's conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax amount of Rs.23,61,61,129/- availed by the assessee during the period from April 2010 to November 2014 as detailed in Annexure A to the show Cause Notice in question is not admissible to the assessee. 31. In this connection, I find that, under Notification No. 26/2005-ST dated 07/06/2005; Input Service Distributor are required to obtain registration with effect from 16/06/2005 as specified by the Central Government under Section 69(2) of Finance Act, 1994. For the purpose of registration of 'input service distributor', Central Government has issued Service Tax (Registration of Special Category of Persons) Rules, 2005 vide Notification No.27/2005-ST., dated 07/06/2005. Under clause (8) of Rule 9(1) of Cenvat Credit Rules, 2004, an invoice issued by input service distributor under Rule, 4A of the Service Tax Rules, 1994. is specified as valid duty paying document for availing cenvat credit. As per Rule 4 (3A) of the Service Tax Rules, 1994, lead Office of the registered manufacture is required to be registered as Input Service Distributor. I find that the assessee has availed cenvat credit on the invoices issued by the Head Office during the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing so the credit taken by the appellant on the basis of the invoices issued by the broadcaster cannot be denied as the invoices clearly show the recipient of service as appellant. Further now the appellants have received these services through M/s Group M Media India Pvt. Ltd., who have enclosed the invoices of the broadcaster alongwith their invoices. M/s Group M Media India Pvt. Ltd. have facilitated the provision of Broadcasting services by the Broadcaster to the appellant and have definitely acted as pure agents , for the provision of these services. Rule 5 (2) of the Service Tax (Determination of Value) Rules, 2006 reads as follows: (2) Subject to the provisions of sub-rule (1), the expenditure or costs incurred by the service provider as a pure agent of the recipient of service, shall be excluded from the value of the taxable service if all the following conditions are satisfied, namely:- (i) the service provider acts as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured (ii) the recipient of service receives and uses the goods or services so procured by the service provider in his capacity as pure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and is an agent in the said invoices. In the said circumstances, there is no doubt that the invoices of the broadcaster in the name of Zapak Digital Entertainment Ltd. and not in the name of Mudra Radar as alleged in the notice Learned AR has relied on the decision Bench of the Tribunal in the case of Balmer Lawrie (supra). It is seen that decision of the Tribunal was overruled by the Hon'ble High Court of Gujarat in the case of Vimal Enterprises as reported in 2006 (195) E.L.T. 267 (Guj.). Learned AR has also relied on the decision of the Gujarat High Court in the case of Marigold Coatings (supra), wherein it was held that duty credit cannot be taken on the strength of endorsed invoice. It can be seen that the instant case is not a case of endorsed invoice. A perusal of invoice clearly shows that the appellant's name mentioning as a advertiser and therefore, it is an invoice issued in the name of the appellant. The advertising agency in the instant case is only act as a conduit for payment... Affirming the above order Hon'ble Bombay High Court observed: ...6. The grievance of the appellant-Revenue is that the invoices issued by the broadcaster also shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the assessee had entered into an agreement with M/s.Group M Media India Pvt Ltd., an Advertising agency for advertisement of the products manufactured by them. The advertising agency utilized the services of some TV Channels for broadcasting the advertisement. The TV Channels paid Service Tax on the broadcasting charges and raised the bills which show the name of the assessee as 'Client' and M/s. Group M Media India Pvt Ltd as the 'agency'. The Tribunal in the case of M/s. Zapak Digital Entertainment Ltd cited supra has observed that since the invoices of the broadcaster clearly show the name of the advertiser as M/s.Zapak Digital Entertainment Ltd and the name of the Advertisement agency is mentioned as Arennt in the invoice it was held that the invoices are issued in the name of M/s Zapak, that since there was no agreement between M/s.Kellog India Pvt Ltd and the broadcaster, the latter cannot issue invoice in the name of the assessee. So, the invoice is issued in the name of the Advertising agency and the purpose of mentioning the name of the client in the invoices was to identify the customer of the Advertising agency. Moreover, the assessee has not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The adjudicating authority denied the credit on the ground that the broadcasting company has not provided service directly to the appellant since the broadcasting company was engaged by the advertising agency. The adjudicating authority confirmed the demand and imposed penalty. 6. We have gone through the copies of sample invoices produced by the applicant, issued by Times Global Broadcasting Co. Ltd. in the invoices it is specifically mentioned that the advertiser is Indian Oil Corporation Ltd. (applicant). Further, we find that the advertising agencies while discharging the service tax liability have not taken into consideration the expenses in respect of the advertisement in the electronic media as clarified by the Board in the circular dated 1.11.1996. For ready reference, the relevant portion of the Board Circular is reproduced below:- 4. It is further to be clarified that in relation to advertising agency, the service tax is to be computed on the gross amount charged by the advertising agency from the client for services in relation to advertisements. This would, no doubt, include the gross amount charged by the agency from the client for making or preparing the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of Rule 3 thereof. Sub-rule (2) of Rule 3 further required any provider of taxable service whose aggregate value of taxable service exceeds certain limit to make an application for registration within the time prescribed. However, there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons disentitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. It was in this background that the Tribunal viewed the requirement as curable. Particularly when it was found that full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire CENVAT credit availed for payment of duty. Question No. 1 therefore shall have to be answered in favour of the respondent and against the assessee.' 4.10 Since we hold in favour of the appellant on merits itself we are not recording any findings on the issue of interest, limitation and penalties. 5.1 Appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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