CENVAT credit on broadcasting services cannot be denied for intermediary invoices when documents show tax payment and verified accounts.

CENVAT credit could not be denied merely because broadcasting invoices were routed through an intermediary where the documents, read together, showed that service tax had been paid on the broadcasting service. The dispute concerned only a documentary discrepancy, not the underlying tax payment, and the CENVAT Credit Rules, read with the relevant circular and the proviso to Rule 9(2), allowed verification of accounts in such intermediary-based advertising arrangements. Decisions on identical facts also supported the claim. Denial of credit was therefore unjustified, and the assessee was entitled to avail the credit.

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Issues: Whether CENVAT credit could be denied merely because the invoices were issued through an intermediary, when the documents taken together showed payment of service tax on broadcasting services.

Analysis: The documents issued by the intermediary and by the broadcasting agency were read together to establish that the service tax element had in fact been paid by the assessee on the broadcasting service. The dispute related only to the form of documentation, not to the underlying tax payment. In the peculiar arrangement of advertising through an intermediary, the circular and the proviso to Rule 9(2) of the CENVAT Credit Rules permitted verification of accounts where there was any documentary discrepancy. The credit was also supported by decisions on identical facts.

Conclusion: Denial of CENVAT credit was unjustified and the assessee was entitled to the credit.

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