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TMI Blog2022 (9) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... r alongwith their invoices. M/s Group M Media India Pvt. Ltd. have facilitated the provision of Broadcasting services by the Broadcaster to the appellant and have definitely acted as pure agents , for the provision of these services. The denial of the credit on the invoices of M/s Group M Media India Pvt. Ltd, taken along with the invoices of the Broadcasters, is not justified. There are no substance in the manner in which Commissioner has sought to distinguish the case of Zapak [ 2018 (9) TMI 759 - BOMBAY HIGH COURT ]. On perusal of the sample invoices it is already concluded that the name of the appellant appear as client (service recipient) on the invoices issued by the Broadcaster, that being it is held that M/s. Group M Media India Pvt Ltd., is pure agent in the provision of the service. Commissioner has not recorded any finding in this order to the contrary. Since it is held in favour of the appellant on merits itself, no findings are recorded on the issue of interest, limitation and penalties. Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the broadcaster. Revenue also objected to credit of Rs.18,54,966/- taken by the Appellants as the invoices against which the credit was taken were raised on godowns, offices & C&F agents, for the reason that these places do not have ISD registration and the invoices bear the address of Head Office. 2.6 According to the department, the appellants suppressed the fact of availment of aforesaid input service credit from the department with intent to avail inadmissible credit and utilize the same for payment of excise duty on the final product. According revenue after undertaking the investigations issued show cause notice dated 30.04.2015 asking the appellants to show cause as to why: (a) the wrongly availed CENVAT credit totally amounting to Rs 23,80,16,095/- (Rs 23,61,61,129/- as detailed in Annexure 'A' + Rs 18,54,966/- as detailed in Annexure 'B') (Rupees Twenty Three Crore Eighty Lakh Sixteen Thousand and Ninety Five only) during the period April 2010 to November 2014 should not be demanded and recovered from them under Rule 14 of the CENVAT Credit Rules, 2004 read with erstwhile proviso to Section 11A(1) and now Section 11A(5) of the Central Excise Act, 1944, w.e.f 08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment between the appellants and GMIPL. This is also the practice prevalent in the industry. * Issue is squarely covered in Hon'ble Tribunal in Zapak Digital Entertainment Ltd.[2017 (49) STR 455 (T)], which has been affirmed by the Hon'ble Bombay High Court as reported at 2018 (9) TMI 759. * For this they also rely on the following decisions: * Indian Oil Corpn Ltd. [2014-TIOL-1246-CESTAT- MUM] * PeakatanaPvt. Ltd. [2018 (9) TMI 1136-CESTAT CHENNAI] * Career Point Info Systems Ltd. [2019 (2) TMT 768-CESTAT New Delhi * Power Soap Ltd. [2018(7) TMI 254 - CESTAT CHENNAI] * Jyoti Laboratories Ltd. [2015(11) TMI 1556 - CESTAT CHENNAI] * Ultratech Cement Ltd. [2017(11) TMI 152 - CESTAT CHENNAI] * No proceeding has been initiated by the service tax department against GMIPL for non inclusion of the broadcasting charges in the taxable value for discharging its service tax liability. Therefore, there is no discrepancy in the invoices issued by GMIPL to the appellants. * GMIPL has fulfilled all the conditions of being a "pure agent" as far as provision of broadcasting service is concerned. GMIPL is, therefore, correct in not including the broadcasting charges in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r paying by utilizing credit availed. NO evidence to that effect has been found submitted by the Appellants. * Further in their written submission the Appellants have stated that, they are not required enquire whether Group M Media India Pvt., is discharging Service Tax or not. * Rule 9(5) of the Cenvat Credit Rules, 2004, is very much clear that the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacture or provider of output services taking such credit. * It is the responsibility of the Appellants to ensure as to whether Group M Media India Pvt., has discharged service tax liability in his capacity of service provider before taking cenvat credit of service tax paid on advertising services. * Even though the Appellants have paid the full service tax amount to them in good faith as admitted by the Appellants in their written submission, the Appellants failed to produce documentary evidence in justification about discharging service tax liability to the government by M/s Group M Media India Pvt. Ltd. * Hence, the invoices/bills issued by M/s Group M Media India Pvt. to the Appellants are not valid documents for availing the cenvat cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Result India Communication Pvt. Ltd. It has been observed that the assessee avails CENVAT credit on input services on the strength of invoices issued by M/s Group M Media India Pvt. Ltd. The said invoices appeared to be compilation of bills raised by Channels raised in the name of M/s Result India Communication Pvt. Ltd. On enquiry with M/s Group M Media India Pvt. Ltd., it was revealed that they are not availing any credit of input services availed for providing services to the assessee. It was also submitted by then that they are neither paying service tax shown in their invoices through GAR 7 challan nor paying by utilizing credit availed. As such it appeared that invoices raised by M/s Group M Media India Pvt. Ltd are not valid documents for availing credit. ii) the assessee availed CENVAT credit op input services on the strength of invoices raised on their various offices, godowns, C&F Agents etc. It was observed that these invoices bore address of their Head Office at Powai. Since it appears that the assessee has not obtained ISD registration at said places where they are availing services to pass on the CENVAT credit, said invoices are not eligible for availing CENV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax paid on input service used in relation to the provision of this output service. 26. However, I find in the instant case that, Group M Media India Pvt. Lid, a service provider of the assessee are not availing any credit of input services availed for providing services to the assessee, Also they are neither paying service tax shown in their invoices through GAR 7 challan nor paying by utilizing credit availed. No evidence to that effect has been found submitted by the assessee in their defence on record. Further, in their written submission the assessee has stated that, they are not required to enquire whether Group M Media India Pvt., is discharging Service Tax or not. I do not find any merit in the assessee's contention because Rule 9(5) of the Cenvat Credit Rules, 2004, is very much clear that the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacture or provider of output services taking such credit. Il was the responsibility of the assessee to ensure as to whether Group M Media India Pvt., has discharged service tax liability in his capacity of service provider before taking cenvat credit of service tax paid on adve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government under Section 69(2) of Finance Act, 1994. For the purpose of registration of 'input service distributor', Central Government has issued Service Tax (Registration of Special Category of Persons) Rules, 2005 vide Notification No.27/2005-ST., dated 07/06/2005. Under clause (8) of Rule 9(1) of Cenvat Credit Rules, 2004, an invoice issued by input service distributor under Rule, 4A of the Service Tax Rules, 1994. is specified as valid duty paying document for availing cenvat credit. As per Rule 4 (3A) of the Service Tax Rules, 1994, lead Office of the registered manufacture is required to be registered as Input Service Distributor. I find that the assessee has availed cenvat credit on the invoices issued by the Head Office during the relevant time. I also find that, assessee has not given any documentary evidence to show that the head office of the assessee situated at Powai is duly registered as 'Input Service Distributor justify the eligibility of such cenvat credit availed by them. 32. Hence, in view of the above, I hold that, the invoices issued by the Head Office of the assessee, prima facie, could not be valid/ correct documents for availing the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinitely acted as "pure agents", for the provision of these services. Rule 5 (2) of the Service Tax (Determination of Value) Rules, 2006 reads as follows: "(2) Subject to the provisions of sub-rule (1), the expenditure or costs incurred by the service provider as a pure agent of the recipient of service, shall be excluded from the value of the taxable service if all the following conditions are satisfied, namely:- (i) the service provider acts as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured (ii) the recipient of service receives and uses the goods or services so procured by the service provider in his capacity as pure agent of the recipient of service; (iii) the recipient of service is liable to make payment to the third party; (iv) the recipient of service authorises the service provider to make payment on his behalf; (v) the recipient of service knows that the goods and services for which payment has been made by the service provider shall be provided by the third party; (vi) the payment made by the service provider on behalf of the recipient of service has been separately indicated in the invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Gujarat High Court in the case of Marigold Coatings (supra), 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..." Affirming the above order Hon'ble Bombay High Court observed: "...6. The grievance of the appellant-Revenue is that the invoices issued by the broadcaster also shows the name of the advertising agency, therefore, the respondent could not avail of the Cenvat credit on the basis of the above invoices. We find that the impugned order of the Tribunal has rendered a finding of fact that the invoices as issued by the broadcaster are in the name of the respondent. It also holds on a finding of fact - that the advertising agency is merely shown as an agent of the respondent. This finding of fact is not shown to be perverse." 4.6 Distinguishing the case of Zapak in the impugned order dated 20.06.2019 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igital Entertainment Ltd cited supra has observed that since the invoices of the broadcaster clearly show the name of the advertiser as M/s.Zapak Digital Entertainment Ltd and the name of the Advertisement agency is mentioned as Arennt in the invoice it was held that the invoices are issued in the name of M/s Zapak, that since there was no agreement between M/s.Kellog India Pvt Ltd and the broadcaster, the latter cannot issue invoice in the name of the assessee. So, the invoice is issued in the name of the Advertising agency and the purpose of mentioning the name of the client in the invoices was to identify the customer of the Advertising agency. Moreover, the assessee has not taken cenvat credit on the basis of the invoices issued by the broadcaster. They have taken credit on the basis of the invoices issued by the Advertising agency. Further, I find that the assessee has not produced any agreement, which authorize the Advertising agency to make payment to the Broadcaster on their behalf and to subsequently recover it from them. In the absence of any such documentary evidence, the Advertisement agency cannot be considered as an 'Agent' for the purpose of making payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, we find that the advertising agencies while discharging the service tax liability have not taken into consideration the expenses in respect of the advertisement in the electronic media as clarified by the Board in the circular dated 1.11.1996. For ready reference, the relevant portion of the Board Circular is reproduced below:- "4. It is further to be clarified that in relation to advertising agency, the service tax is to be computed on the gross amount charged by the advertising agency from the client for services in relation to advertisements. This would, no doubt, include the gross amount charged by the agency from the client for making or preparing the advertisement material, irrespective of the fact that the advertising agency directly undertakes the making or preparation of advertisement or gets it done through another person. However, the amount paid, excluding their own commission, by the advertising agency for space and time in getting the advertisement published in the print media (i.e. Newspapers, periodicals etc.) or the electronic media (Doordarshan, private TV Channels, AIR etc.) will not be includible in the value of taxable service for the purpose of levy o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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