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2013 (11) TMI 452 - AT - Service TaxValuation - inclusion u/s 67 - Cenvat Credit - Duty payment documents - Whether the amounts paid towards advertisement charges to the media houses by M/s DIL but routed through the petitioner, must be included in the gross taxable value attributable to receipts by the petitioner for the taxable advertisement agency service, under Section 67 of the Finance Act 1994 - Held that - total amount, which is described as the gross amount spent by the clients for such services is chargeable to tax except to the extent of the actual charges for advertisements charged by the media, since that component is clearly not rendered by the advertising agency; and that amount is simply a consideration paid to the print or electronic media, as the case may be, for providing /flashing advertisements through that medium. In fact the Board s circular dated 31st October 1996 also clarifies this issue and to the same effect. In so far as the Cenvat credit availed by the petitioner is concerned, the 2004 Rules do not specify that invoices must on the registered office of the claimant - Following decision of ADWISE ADVERTISING PVT. LTD. Versus UNION OF INDIA 2001 (3) TMI 1 - HIGH COURT (MADRAS) - stay granted.
Issues involved:
1. Stay application in respect of a common adjudication order dated 22.8.2012. 2. Confirmation of demand of service tax and recovery of Cenvat credit. 3. Inclusion of amounts remitted to media houses in the taxable value for advertisement agency service. 4. Contravention of Cenvat Credit Rules 2004. Issue 1: Stay application in respect of a common adjudication order The judgment pertains to stay application Nos. 4622-4624/2012 in ST Appeal No.3630-3632/2013 concerning a common adjudication order dated 22.8.2012. The order confirmed the demand of service tax for different periods and directed the recovery of Cenvat credit alleged to have been irregularly availed. The stay application was filed in relation to three Show Cause Notices issued on different dates. Issue 2: Confirmation of demand of service tax and recovery of Cenvat credit The petitioner, an advertisement agency service provider, had entered into an agreement with a client for various advertising activities. The adjudication order confirmed a substantial demand of service tax along with interest and penalties. Additionally, it directed the recovery of irregularly availed Cenvat credit. The order highlighted that the petitioner had wrongly availed service tax credit on invoices not in its name, contravening the Cenvat Credit Rules 2004. Issue 3: Inclusion of amounts remitted to media houses in taxable value The revenue contended that the amounts remitted by the petitioner to media houses should be included in the gross taxable value received for the advertisement agency service provided to the client. However, the Tribunal referred to a judgment of the Madras High Court and a Board's circular, indicating that only actual charges for advertisements should be considered taxable, not the amounts paid to media houses for advertising services. Issue 4: Contravention of Cenvat Credit Rules 2004 Regarding the Cenvat credit availed by the petitioner, it was found that invoices were in the name of another department of the petitioner, leading to the disallowance of Cenvat credit as per the 2004 Rules. The Tribunal noted that the Rules do not mandate invoices to be in the name of the claimant's registered office. Previous orders by the Tribunal had granted relief in cases where Cenvat credit availed was disallowed based on similar grounds. In conclusion, the Tribunal found that the petitioner had a strong prima facie case for relief in the appeal. Consequently, the pre-deposit requirement was waived, and all further proceedings pursuant to the adjudication order were stayed pending the appeal's disposal. The appeal was scheduled to be heard in the usual course.
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