2018 (7) TMI 1012 - AT - Service Tax

Appellant entitled to Cenvat Credit for advertising expenses under CCR 2004

The Tribunal held that the appellant, engaged in Commercial Training and Coaching Services, was entitled to Cenvat Credit for service tax paid to ... CENVAT Credit - input service - advertisement in print media - denial of credit on the ground that advertisement in print media service does not carry any service tax liability - Held that:- The definition of input service under Rule 2(l) of the CCR, 2004 provides for credit on any service used for providing the output service. In addition, in the inclusive part of such definition, various activities have been included in which also the service tax is available as input credit. The inclusive portion specifically mentions advertising services. Consequently there is no doubt that the activity carried out through the advertising agencies can be considered has input service in Rule 2(l) - credit allowed - appeal allowed - decided in favor of appellant. Issues:- Denial of Cenvat Credit for service tax paid to advertising agencies for publishing advertisements in print media.Analysis:The appellant, engaged in Commercial Training and Coaching Services, filed an appeal against the Order-in-Appeal denying Cenvat Credit for service tax paid to advertising agencies for publishing advertisements. The appellant argued that the service tax was paid under Advertising Services, allowable as Cenvat Credit under Rule 2(l) of the CCR, 2004. The appellant contended that the department cannot dispute the classification of input service. The Revenue justified the denial, stating that no service tax was payable on payments to print media as it was exempt. The dispute centered on whether the service tax paid to advertising agencies could be considered an input service for the appellant.The Tribunal considered the agreements and invoices, noting that the advertising agencies provided services in preparing and publishing advertisements in print media. The service tax charged by the agencies appeared to be for services rendered to the appellant. Rule 2(l) of the CCR, 2004 defines input service to include any service used for providing output service, with an inclusive list that specifically mentions advertising services. Therefore, the Tribunal concluded that the service provided by advertising agencies could be considered an input service under Rule 2(l).Consequently, the Tribunal held that the appellant was entitled to the Cenvat Credit for the service tax paid on Advertising Services as an input service. The impugned order denying the credit was set aside, and the appeal was allowed.