Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

Comments

Print   |    |  Comment

PJ/Case Law/2014-15/2361

Whether credit of services availed through intermediary deniable on the ground that invoice does not has mentions name of service recipient ?

Case:-ULTRA TECH CEMENT LTD Vs COMMISSIONER OF CENTRAL EXCISE, TRICHY
 
Citation:-2013-TIOL-1347-CESTAT-MAD
 
Brief facts:- Applicant is a manufacturer of cement and clinkers and they appointed an agent by name M/s. Excellent 2 Publicities for telecasting in TV channels their advertisements and Brand ‘Birla Cement' and ‘Birla Super'. M/s. Excellent 2 Publicities engaged the services of Jaya TV for getting timeslot for broadcasting advertisements. Jaya TV raised invoices on Excellent 2 Publicities showing charges for timeslots along with service tax paid. Excellent 2 Publicities raised invoices on the Applicant for the commission charged by them for the services rendered and service tax paid thereon and further asked for reimbursement of the cost for timeslots and the service tax paid by them on behalf of the applicants to Jaya TV. Applicant have taken service tax credit paid on the commission to Excellent 2 Properties as well as service tax paid by Jaya TV which was reimbursed to Jaya TV through intermediary i.e. Excellent 2 Publicities. Revenue was of the view that the applicant could not have taken credit on the service rendered by Jaya TV because there is no invoice issued by Jaya TV in the name of the applicant. Based on such reasoning, Revenue issued a Show Cause Notice for recovering credit taken during the period 26.7.05 to 3.5.06 and after adjudication, an amount of Rs.41,98,139/- is confirmed against the applicant. Aggrieved by this order, applicant has filed the appeal along with stay application before Tribunal requesting for waiver of pre-deposit of dues arising from the impugned order.
 
Appellant contentions :-The counsel for applicant submits that in the matter of advertisement, CBEC had clarified that the agent who canvasses timeslots would pay service tax only on the commission earned by them. In fact, initially, there was no service tax on the charges for timeslots. Subsequently, when service tax was imposed on the charges for timeslots, the Board clarified that the client in respect of timeslots was not the agency (who canvass timeslot) but the person who actually utilizes the timeslot. Consequent to this type of clarification, the practice was that the intermediary charged service tax only on the commission and the bill raised by the Jaya TV was supplied by the intermediary and reimbursed by the applicant. He submits that there is no doubt that this input service was utilized by the them which comes out clearly from the invoices raised by Jaya TV showing that the timeslots were for advertising their brand of "Birla Cement" and "Birla Super" and therefore the minor issue that invoices raised by Jaya TV is not showing the name of the applicant should not be a reason to deny credit having regard to proviso to Rule 9 (2) of Cenvat Credit Rules. He relies on the following decisions:-
 
a)   EUPEC-Welspun Coating India Ltd. Vs CCE Vadodara 2010 (19) STR 478 (Tri.-Ahmd.) = (2008-TIOL-2616-CESTAT-AHM)
 
b)   Valco Industries Ltd. Vs CCE Chandigarh 2012 (28) STR 457 (Tri.-Del.) = (2012-TIOL-1443-CESTAT-DEL)
 
c)    Pharmalab Process Equipments Pvt. Ltd. Vs CCE Ahmd. 2009 (16) STR 94 (Tri.-Ahmd.) = (2009-TIOL-2215-CESTAT-AHM)
 
As a rejoinder, ld. counsel for applicant submits that bill was paid by the applicant and there is no question of somebody else taking credit because the bill cannot be paid again by some other factory of M/s Ultratech. He also submits that after the period May 2006, the problem has been resolved because now invoices are being issued by TV channels indicate client's name and address also and therefore this issue was of a temporary nature and there is no misuse of any Cenvat credit taken in this case.
 
Respondent contention :- Opposing the prayer, Ld. AR for Revenue submits that invoice issued by intermediary, M/s. Excellent 2 Publicities, is not one of specified documents under Rule 9(2) and M/s. Excellent 2 Publicities is not providing the service of broadcasting. M/s Excellent 2 Publicities has no authority to issue any invoices showing service tax paid on such services and therefore there is no question of taking any Cenvat credit based on invoices issued by the intermediary. In the case of credit based on invoices issued by Jaya TV, he submits that no credit can be taken since name of applicant is not shown on the invoices. He also submits that there is possibility that this credit may be taken by some other factory of the applicant. He relies on the decision of M/s Eagle Plastics Industries Ltd. Vs CCE Pune - 2004 (171) ELT 296 (SC).
 
Reasoning of judgment :-  Considered the arguments on both sides.  Bench was not in agreement with Revenue's argumentthat defect pointed out is fatal to eligibility of credit considering the overall facts andcircumstances of the case. Therefore, bench waived pre-deposit of dues arising from the impugnedorder for admission of appeal and there shall be stay of collection of such dues during pendencyof the appeal.
 
Decision:-Pre-deposit waived.

Comment:-The basic principle of allowing credit is that credit cannot be denied as far as the substantial conditions of receipt of service and its use in provision of output service/manufacturing activity is not doubted and there has been payment of tax of which credit is being taken. In the present case, it was prima facie concluded that merely because the services of broadcasting of advertisements were availed through intermediary person and the invoices issued by the broadcasting service provider did not contain the name of service recipient, credit could not be denied to the service recipient for such procedural lapse. 

Prepared by: Shubham Sancheti

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com