Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

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