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2016 (12) TMI 737 - AT - Service TaxCenvat Credit - duty paying documents - services of sale of space ad time for advertisement - denial of CENVAT credit of Service Tax availed in respect of invoices to broadcaster issued in respect of advertisement of appellant broadcasted by the broadcaster - Held that - In the instant case, the agency being an advertising agency has engaged the broadcaster for the purpose of advertisement. A perusal of the invoices clearly shows that the agency has merely acted as a conduit for transfer of money from the appellant to the broadcaster. The invoices of the broadcaster clearly show the name of advertiser as M/s Zapak Digital Entertainment Ltd. (the appellant). Name of the advertising agency is mentioned and is an agent in the said invoice. In the said circumstances, there is no doubt that the invoices of the broadcaster is issued in the name of Zapak Digital Entertainment Ltd. and not in the name of Mudra Radar as alleged in the notice. Reliance placed on the decision of the case of Marigold Coatings 2016 (5) TMI 10 - GUJARAT HIGH COURT , wherein it was held that duty credit cannot be taken on the strength of endorsed invoice. It can be seen that the instant case is not a case of endorsed invoice. A perusal of invoice clearly shows that the appellant s name mentioning as a advertiser and therefore it is an invoice issued in the name of the appellant. The advertising agency in the instant case is only act as a conduit for payment. Appeal allowed - demand set aside - decided in favor of appellant-assessee.
Issues:
Claim of CENVAT Credit on Service Tax availed in respect of invoices to broadcaster for advertisement. Analysis: The case involved the appellants, a company providing services of sale of space and time for advertisement, who claimed CENVAT Credit on Service Tax based on invoices issued by the broadcaster for advertisements. The dispute arose when a demand show-cause notice was issued seeking to deny the credit of Service Tax availed on these invoices. The Commissioner confirmed the demand, imposing a penalty under section 78 of the Finance Act, 1994. The appellants challenged this decision before the Tribunal. The appellant's argument centered around their engagement of an advertising agency to organize a broadcaster for carrying out the advertisement. The advertising agency invoiced the appellant for the total amount, including the fee paid to the broadcaster, Service Tax, and the agency commission. The appellant claimed credit based on invoices issued by the broadcaster, which clearly mentioned their name. The invoices indicated the payment of Service Tax by the advertising agency on the commission and by the broadcaster on the fee. The appellant contended that they had not availed credit on the agency's invoices but on the broadcaster's invoices, which explicitly identified them as the advertiser. On the other hand, the Respondent argued that the tax paid by the advertising agency to the broadcaster was for input services by the agency, not for the appellant. It was contended that since the broadcaster's invoice was raised on the agency, not the appellant, it could not be considered that the broadcasting service was received by the appellant. The Respondent relied on legal precedents to support their stance, emphasizing the lack of provision for invoice endorsement in the rules. Upon reviewing the submissions, the Tribunal found that the agency acted as a conduit for transferring money from the appellant to the broadcaster. The invoices clearly showed the appellant's name as the advertiser, with the agency mentioned as an agent. The Tribunal distinguished previous decisions cited by the Respondent, highlighting that in the present case, the invoice was issued in the name of the appellant, not the agency. The Tribunal noted that the case did not involve an endorsed invoice and concluded that the agency was merely facilitating payment on behalf of the appellant. In light of the analysis, the Tribunal did not find merit in the impugned order and allowed the appeal, thereby ruling in favor of the appellant's claim for CENVAT Credit on the Service Tax availed in respect of invoices to the broadcaster for advertisement.
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