TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1280
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....of breakfast cereals and avails the CENVAT credit of excise duty paid on inputs and capital goods and service tax paid on input services used in relation to the manufacture of their final products. 2.2 The appellants entered into an agreement with M/s. Group M Media India Private Limited (GMIPL) for advertisement of their final products in various media such as TV channels. GMIPL has a division by the name of MindShare in Mumbai. GMIPL/ MindShare in turn entered into agreement with the TV channel (broadcaster) for broadcasting the advertisement of the appellants' final products. As per the agreement, the TV channels raised invoices on GMIPL/ MindShare for broadcasting charges along with service tax thereon. The invoice also mentions the appellants' name as the client i.e., the recipient of the broadcasting service. 2.3 As per the above arrangement, GMIPL raised two separate invoices on the appellants in respect of the following: (a) commission/agency fees along with service tax thereon; and (b) reimbursement of TV channel cost (broadcasting charges plus service tax mentioned in the invoice raised by TV channel). 2.4 The invoice raised by GMIPL on the appellants for r....
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....in para 1 above. Aggrieved appellants have filed these appeals. 3.1 We have heard Shri Gajendra Jain and Shri Rajesh Ostwal, Advocates for the appellant and Shri Sydney D Silva, Additional Commissioner, Authorized Representative for the revenue 3.2 Arguing for the appellant, learned counsel submits that * The appellants have correctly taken cenvat credit of service tax paid on the broadcasting service received from various TV channels. The sole finding given by the Commissioner in the impugned Order-in-Original for denial of cenvat credit is that the invoices issued by GMIPL are not valid documents for taking credit since GMIPL is neither taking credit on the input services nor paying the service tax mentioned in their invoices. * The appellants took credit of service tax paid on broadcasting service on the basis of invoices raised by GMIPL read with the corresponding invoices raised by TV channels on GMIPL/MindShare. The invoice raised by GMIPL on the appellants for reimbursement of TV channel cost is nothing but a compilation of the invoices raised by TV channels. The invoices issued by TV channels for provision of broadcasting service are proper documents specified in Rule....
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....the basis of which such credit has been taken bear the address of the head office. The Head Office of the appellants was not registered as an ISD for distribution of cenvat credit during the relevant time, however, the same will only amount to a procedural lapse and such defect is remediable in nature. Reliance is placed on the following decisions: * Doshion Ltd. [2013 (288) ELT 291 (T)] affirmed by the Hon'ble High Court at [2016 (2) TMI 183 (Guj.)] and (affirmed by Hon'ble Supreme Court reported at 2015(8) TMI 439 SC * Tide Water Oil Co. (India) Ltd [2022 (2) TMI 1069 - CESTAT] * National Engineering Industries [2015 (9) TMI 1035 - CESTAT DELHI] * Samita Conductors Ltd. [2012 (278) ELT 492 (T)] * Demosha Chemicals Pvt. Ltd [2014 (34) STR 758 (T] (Refer page 72 of the case law compilation) * Hindustan Zinc Ltd. [2013 (291) ELT 464 (T)]. * Biotor Industries Ltd. [2018 (10) GSTL 34 (T)] * Greaves Cotton Ltd. [2014 (8) TMI 654 - CESTAT CHENNAI] * SGS India Pvt. Ltd. [2011 (270) ELT 115 (T)] * Jai Chemicals Vs. CCE [2015 (40) STR 345 (T)]. * Extended period of limitation could not have been invoked. * Interest cannot be demanded, as demand itself is not....
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.... cost Client paying to agency in advance for payments to be made to others - HELD : Agency was not working as pure agent of client - Agency was liable to pay Service tax on gross amount charged from their clients in respect of Advertising Agency services rendered - Plea that amount included in bills raised in addition to commission charged was reimbursement of expenses actually paid by advertising agency, rejected. * The decision in case of Zapak Digital Entertainment Ltd is distinguishable and has been distinguished Para 10 & 11 of the impugned order dated 20.06.2019 in Appeal No E/87801/19. * Since there is an involvement of M/s RICPL in the entire transactions M/s GMIPL have not acted as a 'Pure Agent. The expenditure and costs have been incurred by M/s RICPL who have been issued an invoice by the Broadcasters. A compilation of such invoices is then endorsed and sent to Kellogg by GMIPL by preparing a separate invoice. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of arguments: 4.2 In the present case we are referring to the impugned order dated 30.10.2015 subject matter of Appeal No E/85186/2016. For confirm....
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....in the SCN that, M/S Group M Media India Pvt. Ltd., 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. In this context I find that, as per Rule 5 of the Service Tax (Determination of Value) Rules, 2006, where any expenditure or costs are incurred by the service provider in the course of providing taxable services, all such expenditure or costs shall be treated as a consideration for the taxable services provided or to be provided and shall be included in the value for the purpose of the charging service tax on the said service. The value added tax practiced in India is on invoice basis. The service tax liability has to be discharged on the gross amount charged to the client and the service provider can avail service tax/ excise duty paid on the inputs or input services used in relation to the provision of output service. Rule 5 of the Service Tax (Determination of Value) Rules, 2006 makes it abundantly clear that where any expenditure or costs are incurred by the service provider in the course of providing service,....
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....o them and required to be paid/ reversed from them, In support my view, I rely on the decision of Tribunal Mumbai in the case of Quadrant Communications Lid v/s CCE, Pune-III (2012 (26) S.T.R. 33 (Tri.-Mumbai)] 27. further find that the decision of the Tribunal in the case of M/s Indian Oil Corporation Lid v. CCE, Mumbai-II (2014-TIOL- 1246-CESTAT-MUM), which has been referred by the assessee and stated that the same is squarely applicable in the present case. In this connection I find that the said case is different from the case in hand because it was the case of admissibility of service tax credit paid by the broadcasting agency to the advertising agency engaged by applicant whereas the present case is about the admissibility of credit of service lax not paid by the advertising company. Hence. I do not find any merit in this regard put forth by the assessee 28. In view of the above facts, I hold that the assessee has not satisfied all the conditions as per Rule 9(1) of Cenvat Credit Rules. 2004 and Rule 4A (1) of Service Tax Rules 1994 i.e. receipt of eligible input services. availment of cenvat credit on the strength of specified documents, and payment for value of services....
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....t Rules, 2004. I do not find to consider the case laws relied upon by the assessee in this regard us the same are issued prior to issue of the CESTAT, Kolkata's order referred to above. 33. In view of the above, I hold that the cenvat credit amounting to Rs. 18,54,966/- being the credit taken on the invoices issued by the Head Office without registration as Input Service Distributor, is not admissible to the assessee and required to be recovered from them alongwith interest under the provisions of Rule 14 of the CENVAT Credit Rules'2004 read with erstwhile proviso to Section 11A(1) and now Section 11A(5) of the Central Excise Act'1944 w.e.f. 08.04.2011." 4.3 Commissioner has in the impugned order as per para 15 framed two issues for consideration and has recorded his findings on these issues as detailed above. For the consideration of the first issue framed by the Commissioner we reproduce the sample invoices on strength of which the appellant have taken the disputed credit: 4.4 From the perusal of the invoices issued by the broadcaster, it is quite evident that the name of the appellant appears on each and every invoice of the service provid....
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.... nor holds any title to the goods or services so procured or provided as pure agent of the recipient of service; (c) does not use such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services. 4.5 In view of the above in our view 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. In the case of Zapak International Entertainment Ltd referred to by the Appellants, tribunal observed: 4. We have gone through the rival submissions. We find that it is not disputed that the appellants have engaged the services of an agency for advertisement. Agencies are by definition working on behalf of their client. In the instant case, the agency being an advertising agency has engaged the broadcaster for the purpose of advertisement. A perusal of the invoices clearly shows that the agency has merely acted as a conduit for money from the appellant to the broadcaster. The invoices of the broadcaster clearly show the name of advertiser as M/s. Zapak Digital Entertainment Ltd. (the appellant). Name of the advertising ....
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....caster and the advertiser ie M/s. Zapak, by the broadcaster was paid by M/s. Zapak Digital Entertainment Ltd. The cenvat credit was availed by M/s.Zapak Digital Entertainment on the strength of the invoices issued by the broadcaster in favour of M/s. Zapak Digital Entertainment and also containing name of the advertising agency. After considering the submissions of both sides, the Tribunal at Para-4 of its judgment has observed as under: "........" On the basis of the above findings, the Tribunal has allowed the appeal. Aggrieved by the said order, the department has filed appeal before the Hon'ble Bombay High Court and vide its judgment dated 05.09.2018, the High Court has dismissed the appeal by observing as under: "........" It is seen from the above judgments of the CESTAT and the Hon'ble Bombay High Court that the invoices issued by the broadcaster are in the name of the respondent i.e M/s. Zapak Digital Entertainment Ltd and that name of the advertising agency is mentioned merely as an agent of the respondent. In the instant case, credit has been taken on the invoices of advertising agency, which indicate the name of the assessee. 11. In the present case, I ....
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....y finding in this order to the contrary. As observed by us earlier the issue is squarely covered by the decision of tribunal and Hon'ble Bombay High Court in the favour of the appellant. 4.8 In the case of Indian Oil Corporation Lid [2014-TIOL-1246- CESTAT-MUM)] the facts as recorded in para 2 and the findings as recorded by the tribunal in subsequent paras are reproduced below: "2. The appellant, M/s. Indian Oil Corporation Ltd., is a Public sector Undertaking engaged in the manufacture of petroleum products. The applicant engaged the services of four advertising agencies for preparing the advertisements for their products. The advertising agencies further engaged the services of Times Global Broadcasting Co. Ltd. for broadcasting the advertisements. The broadcasting company paid service tax in respect of taxable service provided by them and recovered the amounts from the advertising agencies. The advertising agency also raised invoices in favour of the applicant. The appellant availed credit in respect of the service tax paid on the taxable service of broadcasting done by Times Global Broadcasting Co. Ltd. The Revenue issued show cause notice for denial of such credit. The adj....
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....ces and has also borne the incidence of Service Tax, he came to the conclusion that the appellant is rightly eligible for the benefit of the CENVAT Credit of the Service Tax paid on broadcasting service. The same ratio shall apply for the previous period also. Therefore, we do not find any merit in the impugned order. Accordingly, we set aside the same and allow the appeal with consequential relief, if any, in accordance with law." In our view this decision also decides the issue in hand in favour of the appellant and the distinction sought to be made in the impugned orders cannot be sustained. 4.9 The second issue framed by the Commissioner in the impugned order is squarely covered by the decision in the case of Doshion referred to by the Appellant. Hon'ble Bombay High Court while affirming the order of tribunal observed as follows: "7. The second objection of the Revenue as noted was with respect of non-registration of the unit as input service distributor. It is true that the Government had framed Rules of 2005 for registration of input service distributors, who would have to make application to the jurisdictional Superintendent of Central Excise in terms of Rule 3 thereof. ....