Custom, Excise & Service Tax Tribunal
Cce, Ludhiana vs M/S Pepsi Food Pvt. Ltd on 21 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH-160017 DIVISION BENCH COURT NO.1 Appeal No. E/963/2007-Ex(DB) [Arising out of the Order-in-Original 11-12/Ldh/2006 dated 09.06.2006 passed by the CCE (Appeals), Ludhiana) Date of Hearing/Decision: 21.09.2016 For Approval & signature: Honble Mr.Ashok Jindal, Member (Judicial) Honble Mr.Devender Singh, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes CCE, Ludhiana Appellant Vs. M/s Pepsi Food Pvt. Ltd. Respondent
Appearance Sh. V. Gupta, AR, for the appellant Ms. Krati Somani, Advocate, for the respondent CORAM:Honble Mr.Ashok Jindal, Member (Judicial) Honble Mr.Devender Singh, Member (Technical) FINAL ORDER NO.: 61388/2016 PER: ASHOK JINDAL
1. The short issue involved in the matter is that whether the respondent is entitled to avail cenvat credit on Advertisements/Sale Promotion services as per Rule 2(l) of the Cenvat Credit Rules, 2004 when it has been admitted that the respondent manufactured concentrate exclusively used for the manufacture of the respective aerated waters which was advertised by the appellant or not.
2. Heard the parties and considered the submissions.
3. The identical issue came up before the Honble Bombay High Court in the case of Coca Cola India Pvt. Ltd. 2009(15) STR 567 (Bom.), wherein the issue was as under:
(a) Whether services of advertising and marketing procured by the appellants in respect of advertisements for aerated waters are covered by the definition of thewords Input Services as defined in rule 2(l) of the Cenvat Credit Rules, 2004, when admittedly the appellants manufacture concentrates exclusively used for the manufacture of the respective aerated waters which are advertised by the appellants?
And the Honble High Court of Bombay held that:
43. What follows from the above discussion is that the credit is availed on the tax paid on the input service, which is advertisement and not on the contents of the advertisement. Thus it is not necessary that the contents of the advertisement must be that of the final product manufactured by the person advertising, as long as the manufacturer can demonstrate that the advertisement services availed have an effect of or impact on the manufacture of the final product and establish the relationship between the input service and the manufacture of the final product. The manufacturer thereby can avail the credit of the service tax paid by him. Once the cost incurred by the service has to be added to the cost, and is so assessed, it is recognition by Revenue of the advertisement services having a connection with the manufacture of the final product. This test will also apply in the case of sales promotion.
4. We find that as the respondent has included the expenses of advertisement/sale promotion in the assessable value of the concentrate sold by them. Therefore, the respondent is entitled to avail cenvat credit on advertisement/sale promotion services.
5. With these observations, we do not find any infirmity in the impugned order. The same is upheld. The appeal filed by the Revenue is dismissed.
(Dictated and pronounced in the open court)
(Devender Singh) ( Ashok Jindal)
Member (Technical) Member (Judicial)
rt
1
E/963/2007
CCE, Ludhiana
Vs.
M/s Pepsi Fool Pvt.Ltd.