Appellant entitled to Cenvat credit for advertising services under service tax law.

The appellant was entitled to Cenvat credit on service tax paid for advertising services. The Member (J) held that the appellant paid the service tax based on the bill issued by the advertising agency, and the jurisdictional officers had no authority to bifurcate the taxable value. The denial of credit, interest, and penalty was deemed unsustainable. The impugned orders were set aside, and the appeal was allowed in favor of the appellant.

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Issues:
1. Entitlement to Cenvat credit on service tax paid for advertising services.

Analysis:
The appellant entered into an agreement with an advertising agency for advertising their products on TV channels, paying service tax and availing Cenvat credit. The Revenue contended that since only 85% of the bill amount was paid to the TV channels and 15% to the advertising agency, the appellant was not entitled to avail the entire credit. The Adjudicating Authority confirmed the demand of Cenvat credit along with interest and penalty.

The Commissioner (Appeals) upheld the Adjudication Order. However, upon review, the Member (J) found that the appellant paid the service tax based on the bill issued by the advertising agency. It was undisputed that the service tax was paid by the agency under the category of advertising services. The Member (J) held that the jurisdictional officers had no authority to bifurcate the taxable value when the payment of service tax by the agency was not in question. Reference was made to a previous Tribunal decision to support this view.

Consequently, the denial of credit, interest, and penalty on the appellant was deemed unsustainable. Therefore, the impugned orders were set aside, and the appeal filed by the appellant was allowed. The judgment was pronounced in an open court setting.

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