Case:- ULTRA TECH CEMENT LTD Vs COMMISSIONER OF CENTRAL EXCISE, TRICHY

Citation:- 2013-TIOL-1347-CESTAT-MAD
Issue :- Whether the credit will be allowed if the invoice issued by the provider does not contain the
name of actual service receiver whereas issued in the name of intermediary who arranged the service?
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 contention :- 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-TIOL1443-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 argument
that defect pointed out is fatal to eligibility of credit considering the overall facts and
circumstances of the case. Therefore, bench waived pre-deposit of dues arising from the impugned
order for admission of appeal and there shall be stay of collection of such dues during pendency
of the appeal.
Decision :- Pre-deposit waived.
Comment :Credit availed on
advertisement service - Credit denied on the ground that the invoices issued by the TV
channels(ultimate service receiver) do not contain the name of the appellant and were issued in the
name of
intermediary who arranged the service - Defect is not fatal to the eligibility of the credit