2018 (11) TMI 1289 - AT - Service Tax

Imposition of penalty under Rule 15(4) of Cenvat Credit Rules, 2004 - short payment of Service Tax - non-payment of service tax on the amount paid to the print/electronic media for publishing/broadcasting advertisements in print and electronic media - irregular availment of Cenvat Credit. Held that - Considering the amount involved for availing Cenvat Credit wrongly, the Adjudicating Authority failed it appropriate not to impose penalty under Rule 15 (4) of the Cenvat Credit Rules, 2004, which we find is not irregular in any way. The issue involved in this case is only that the Respondent has got sale input invoices at the Cuttack Branch at the strength of which credit was taken by the Respondent. This appears to be genuine mistake and is not serious breach of the Cenvat Credit Rules. The Adjudicating authority has correctly held that the service tax was not required to be paid by the Respondent on the amount paid by them to the print media and they have rightly paid the service tax on the discount and commission allowed by the print media during the material period. Regarding broadcasting advertisements by the Respondent, it is on record that the Respondent has arranged broadcasting advertisements and submitted some bills and invoices issued by the electronic media and corresponding debit notes and invoices issued by them to their clients - the Respondent cannot be made liable to pay service tax again on the amount charged for sale of time and space in electronic media, which was held to be separate tax altogether. However, the amount received by the Respondent for providing the service as an intermediary was liable to service tax. The Revenue has not brought before us any evidence to show that there is any suppression, malafide on the part of the Respondent in submitting figures before the Adjudicating Authority - there is no infirmity in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Short payment of service tax on advertisements in print/electronic media and irregular Cenvat Credit availed.
2. Imposition of penalty under Rule 15(4) of Cenvat Credit Rules, 2004.

Issue 1: Short Payment of Service Tax and Irregular Cenvat Credit:
The case involved a dispute regarding the Respondent's payment of service tax for advertisements in print and electronic media and irregular availment of Cenvat Credit. The Revenue contended that the Respondent failed to pay service tax correctly, especially after July 2006 when debit notes were raised to clients. The Adjudicating Authority upheld charges related to irregular Cenvat Credit, interest, and penalty. However, the demand for a substantial amount was dropped, and no penalty was imposed under Section 78 of the Act. The Revenue argued that the service tax should have been paid based on the amount received, not billed, and discrepancies in the accounts were not reconciled. The Adjudicating Authority's scrutiny was deemed inadequate, and the non-imposition of certain penalties was challenged.

Issue 2: Imposition of Penalty under Rule 15(4) of Cenvat Credit Rules, 2004:
Regarding the imposition of penalty under Rule 15(4) of the Cenvat Credit Rules, 2004, the Department contended that penalties should have been imposed for contraventions. However, upon review, it was found that the Adjudicating Authority's decision not to impose penalties was appropriate. The issue centered on the Respondent's availing of Cenvat Credit at their Cuttack Branch, which was considered a genuine mistake and not a serious breach of the rules. The Tribunal concluded that no penalty was warranted in this particular instance.

In conclusion, the Tribunal analyzed the issues thoroughly. It was determined that the Respondent had not short paid the service tax as alleged by the Revenue. The service tax payment for advertisements in print and electronic media was found to be in compliance with relevant regulations. The Tribunal upheld the Adjudicating Authority's decision and rejected the Revenue's appeal. Additionally, the issue of irregular Cenvat Credit availed at the Cuttack Branch did not warrant penalties under Rule 15(4) of the Cenvat Credit Rules, 2004. The Tribunal's detailed analysis and decision provided clarity on the disputed matters, ensuring a fair resolution in this case.