9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 184 - AT - Service TaxCENVAT Credit - invocation of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 for demand of amount in respect of 85% component of the consideration received by the appellant, which was subsequently paid to the news media which published the advertisements collected by the appellant. HELD THAT - The service provider should be providing more than one services and when one of the services provided is exempted, then alone the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 are invokable. In the present case, Revenue has failed to establish that there are more than one services provided by the appellant. Appellant is providing only one service whether it is earlier classified as advertising agency service or subsequently classified as business auxiliary service. Appellant is merely providing one service and, therefore, the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 are not invokable in the present case. Therefore, the demands involved in both the appeals are not sustainable. The impugned order-in-original dated 18.11.2016 is modified to the extent that the demand confirmed to the tune of Rs.4,90,25,118/- is set aside and interest and penalty associated with that imposed on the appellant are set aside - Appeal allowed.
Issues involved:
The issues involved in the judgment are related to the demand of service tax on the appellant for the amount collected from ultimate customers and remitted to newspapers or magazines for advertisements, invoking the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004. Summary: Issue 1: Demand of service tax on 85% amount collected from ultimate customers: The appellant, a service provider registered for Service Tax since 1996, retained 15% of the amount charged to ultimate customers for advertisements and remitted the remaining 85% to newspapers or magazines. The Revenue demanded service tax on the 85% amount not retained by the appellant. The appellant contested the demand, arguing that the 85% amount was towards media cost and not retained by them, hence not subject to service tax. The Tribunal held that the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 require more than one service to be provided by the appellant for the demand to be sustainable. As the appellant was providing only one service, the demand was not sustainable. The demand of Rs.4,90,25,118/- was set aside, along with associated interest and penalties. Issue 2: Application of Circulars and alternative arguments: The appellant relied on Circular No. 341/43/96-TRU dated 31.10.1996, while the Revenue referred to Circular No. 96/7/2007-ST. The appellant argued that the Circular dated 31.10.1996 exempted the 85% component from service tax, as clarified by CBEC. The Tribunal found that the appellant's service of arranging advertisements did not fall under the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004. The Tribunal also considered the alternative argument presented by the appellant regarding the Revenue's stand on the demand of service tax. The Tribunal set aside the order-in-original dated 31.01.2019. Conclusion: Both appeals were allowed, and the impugned orders were set aside. The Tribunal held that the demand of service tax on the 85% amount collected from ultimate customers was not sustainable under the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004.
|
