2014 (2) TMI 574 - AT - Service Tax

Denial of credit on services rendered No invoice issued in the name of assessee Waiver of Pre-deposit Held that - In the matter of advertisement, CBEC had clarified that the agent who canvasses timeslots would pay service tax only on the commission earned by them - the intermediary charged service tax only on the commission and the bill raised by the Jaya TV was supplied by the intermediary and reimbursed by the applicant - there is no doubt that the input service was utilized by the them which comes out clearly from the invoices raised by Jaya TV showing that the timeslots were for advertising their brand of Birla Cement and Birla Super and therefore the minor issue that invoices raised by Jaya TV is not showing the name of the applicant should not be a reason to deny credit having regard to proviso to Rule 9 (2) of Cenvat Credit Rules Relying upon EUPEC-Welspun Coating India Ltd. Vs CCE Vadodara 2008 (8) TMI 515 - CESTAT, AHMEDABAD Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
1. Eligibility of Cenvat credit on service rendered by Jaya TV.
2. Validity of invoices issued by intermediary for claiming credit.
3. Requirement of applicant's name on invoices for credit eligibility.

Analysis:
Issue 1: Eligibility of Cenvat credit on service rendered by Jaya TV
The applicant, a cement manufacturer, appointed an agent for telecasting advertisements. The Revenue contended that the applicant could not claim credit as there was no invoice from Jaya TV in their name. However, the applicant argued that they were entitled to credit based on CBEC clarification that the service tax was to be paid only on the commission earned by the agent. The Tribunal noted that the invoices from Jaya TV clearly showed the timeslots were for advertising the applicant's brand, justifying the utilization of the input service. Citing relevant case laws, the Tribunal held in favor of the applicant, allowing the credit.

Issue 2: Validity of invoices issued by intermediary for claiming credit
The Revenue argued that the intermediary, not providing the broadcasting service, had no authority to issue invoices with service tax details, making the invoices invalid for claiming Cenvat credit. However, the applicant contended that the intermediary's invoices were reimbursed by them, indicating utilization of the service. The Tribunal considered the overall facts and circumstances, disagreeing with Revenue's stance, and allowed the applicant to claim credit based on the intermediary's invoices.

Issue 3: Requirement of applicant's name on invoices for credit eligibility
The Revenue further contended that since the applicant's name was not on the invoices from Jaya TV, credit could not be claimed, citing a precedent. The applicant rebutted, emphasizing that they had paid the bills and no other factory could claim the credit. They also highlighted that the issue was temporary and had been resolved post-May 2006 with invoices now indicating client details. The Tribunal, considering the payment made by the applicant and the temporary nature of the issue, waived the pre-deposit of dues and stayed the collection during the appeal's pendency.

In conclusion, the Tribunal ruled in favor of the applicant, allowing them to claim Cenvat credit on the services rendered by Jaya TV, based on the utilization of the input service for advertising their brand. The Tribunal also upheld the validity of invoices issued by the intermediary, disregarding the absence of the applicant's name on Jaya TV's invoices due to the temporary nature of the issue and the applicant's payment of the bills.