2017 (7) TMI 399 - AT - Central Excise

CENVAT credit - duty paying invoices - it was alleged that documents did not have the requisite information as required under Rule 4A of the Service Tax Rules and there was no indication whether the distributed credit is in respect of duty paying unit or the exempted unit - Held that - It was reported that the invoices issued by service providers on the basis of which M/s Dabur India Ltd. had taken the impugned credit and distributed to their unit at Baddi contained the details/information i.e. name & address of service provider, service tax registration number, invoice/bill number & date, name of service, value of taxable service and service tax paid/payable etc and no other discrepancy has been noticed except the following discrepancies relating to invoices of M/s Thakur ji Sons, wherein it was found that the service tax registration number is mentioned on invoices as Applied For instead of PAN based registration number. On the invoices of 18 others services providers, the discrepancy was that Service Tax registration number mentioned in invoices was not PAN based registration number. We find that these are remediable defects and denial of input credit on that basis may not be justified - Since there are technical discrepancies in relation to 18 out of 29 advertisers as brought out by the aforesaid verification report, the matter is remanded to the original adjudicating authority for fresh decision - matter on remand. CENVAT credit - Broadcasting services - advertising services - Held that - the Dabur India Ltd. Kaushambi is the recipient of two services, namely, the service from the advertising agencies like DADBUR and broadcasting agency service by the broadcasters. The invoices of broadcasters are telescoped into the invoice of advertiser indicating service tax paid by them. The bills by the broadcasters are raised on the appellant. The amount charged by the broadcasters does not form part of the taxable value of the services provided by the advertising agency. The Service Tax charged by the advertising agency is on the commission it charges, which is mentioned in the invoices issued to M/s Dabur India Ltd. Kaushambi. We find merit in the contention of the appellant that the Broadcasting and advertisement have been done on behalf of the appellant and they have borne the incidence of Service Tax, the credit cannot be denied. Appeal allowed in part and part matter on remand.

Summary

Issues:
Appeal against disallowance of Cenvat Credit on input services due to lack of requisite information on documents and ambiguity regarding credit distribution.

Analysis:
1. The appellants contested the disallowance of Cenvat Credit amounting to ?88,38,702/- along with interest and penalty imposed by the Commissioner. The Department found discrepancies in the documents issued by the head office, Dabur India Ltd., regarding necessary details required under Rule 4A of the Service Tax Rules, 1994. The Commissioner's order did not address the second issue raised in a different notice. The appellant argued that the invoice from ISD contained all required details and the credit was verified by the Department without discrepancies. They also emphasized the admissibility of credit at the recipient's end and cited relevant case laws to support their claim.

2. The Tribunal examined the verification report on invoices issued by Dabur India Ltd. Kaushambi and found that most details were provided, except minor discrepancies in a few invoices. The Tribunal referred to a previous judgment regarding the admissibility of credit distributed by an Input Service Distributor (ISD) and emphasized that denial of credit should not be based on remediable defects. The Tribunal also highlighted the necessity for ensuring the admissibility of credit at the ISD level before accepting invoices as valid documents.

3. The Tribunal addressed the Commissioner's finding that the credit distributor had distributed more credit than the service tax paid. They noted that the Commissioner overlooked the nature of the advertising agency service and emphasized that such an allegation was not part of the show cause notice. Referring to a Board Circular, the Tribunal clarified that the service tax is computed on the gross amount charged by the advertising agency, excluding expenses for space and time in media. They concluded that since the appellant bore the incidence of service tax for broadcasting and advertising services, the credit cannot be denied.

4. Consequently, the Tribunal found no merit in the Commissioner's argument and set aside the impugned order. Due to technical discrepancies in some invoices, the matter was remanded to the original adjudicating authority for a fresh decision after rectifying the defects. The appeal was disposed of by way of remand, allowing consequential relief in accordance with the law.

This detailed analysis of the judgment provides insights into the issues raised, arguments presented by both parties, relevant legal principles, and the Tribunal's findings leading to the decision to set aside the Commissioner's order and remand the matter for further consideration.