Custom, Excise & Service Tax Tribunal
M/S Shakun Advertising Private Limited vs C.C.E., & S.T., Jaipur-I on 21 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER
Date of Hearing: 14/10/2015
Date of Pronouncement: 21/10/2015
Appeal No. ST50277/2015-ST(SM)
(Arising out of OIA No. 70(SLM) ST/JPR-I/2014 dated 21.10.2014 passed by the Commissioner (Appeals) Central Excise & Customs, Jaipur-I)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
M/s Shakun Advertising Private Limited Appellant
Vs.
C.C.E., & S.T., Jaipur-I Respondent
Appearance:
Present for the Appellant: Ms. Asmita A. Nayak and Shri Ranjeet Ranjan, Advocate Present for the Respondent: Shri S. Nunthuk, AR Coram: Honble Ms. Sulekha Beevi C.S., Member (Judicial) Final Order No.53222/2015 Per: Sulekha Beevi C.S. The appellant is engaged in providing services under the category of advertisement agency service and are registered with service tax department. A show cause notice dated 19.10.2011 was issued raising two allegations. (1) That appellant wrongly availed credit on event management services as these services are not related to their output services. (2) That appellant undervalued taxable value in regard to commission received in print media advertisement service and there was short payment of service tax of Rs.48,705/-. After adjudication the Order-in-Original confirmed the demand, interest and penalty. In appeal, the same was upheld by the Commissioner (Appeals). Aggrieved the appellant is before the Tribunal.
2. The foremost issue to be considered is whether credit of service tax paid on event management service availed by appellant is admissible or not. The period in dispute is from 2008-09 to 2010 to 2011. The case put forward by the department in the show cause notice is that the appellant is registered for advertisement agency service only. The appellant availed credit of service tax paid on event management services availed by the appellant. The services related to event management services though classifiable separately, the appellant had not obtained registration under this category. That accordingly the service received by appellants under this category cannot be said to be input services for providing their out put service.
3. The learned Counsel appearing on behalf of the appellant, Ms. Asmita A. Nayak explained the activities of the appellant Company. The appellant is an Accredited Advertising Agency of Indian News Paper Society (INS) and provides advertisement both by electronic media and print media. Appellant availed services of event management for providing their out put service i.e; advertisement agency services. The event management concerns conduct event likes shows, exhibitions etc for displaying exhibiting various consumer goods. The venue, stage, space for display and exhibition is arranged by these event management concerns. They also do the work of obtaining approvals from the government, matters of marketing, publicity of the event etc. The Companies can display their product in such events and also space for sale is also arranged. The appellant obtains spaces for advertisement in such shows, exhibitions etc by availing the service of event management concerns. The learned counsel pointed out that the definition of advertising agency means any person engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant. The appellant as an advertising agency procure spaces fit for advertisement through the event management concerns. The Commissioner (Appeals) in the impugned order entertained the view that the appellant being an Accredited Advertising Agency of Indian News Paper Society (INS), the event management services do not fall into the category of input services for services provided in the print media. That there is no evidence that to earn Commission from print media event management services are essential. As explained by the Counsel for appellant, the appellant is an advertising agency and their activities are not confined to print media alone. The service of advertising agency as pointed out from the definition includes exhibition, display etc. It has to be noted that the period is prior to 1.4.2011 when the definition of input service had a wider ambit. The activities as explained and borne out from records establish that event management services availed by appellant is related to the output service of providing advertisement services. Again, the denial of credit on the ground that they are not registered for event management services is not tenable. The payment of service tax is not disputed. The grounds on which credit has been denied is too flimsy and feeble. Therefore I hold that event management services being input services would be eligible for credit.
4. The second issue is with regard to the short payment of service tax of Rs.48,705/-. It is the case of the department that appellant short paid the tax in some cases by paying service tax by valuing the Commission received as 15%. Whereas, the appellant has received more than 15% commission in some cases. The learned counsel for appellant submitted that as an accredited agency the appellant usually receives 15% as commission. When advertisement is to be published in print media outside the state of Rajasthan, the appellant pass on the orders to another agency namely M/s Barsaria Advertisement Ltd. Barsaria raises bills in the name of appellant company on which service tax on 15% billing amount is charged by M/s Barsaria. They also give discount of 12.5% of the billing amount to the appellant. Thus in a few cases in which the commission received was more than 15% the appellants omitted to pay service tax for the higher amount of commission received. It occurred only by mistake because generally the commission received is 15% and service tax was being paid on 15%. The learned counsel submitted that the short payment occurred only with regard to 18 cases and on coming to know about it the appellant deposited the tax with interest even before the issuance of show cause notice. A penalty of Rs.48,705/- is imposed alleging suppression under Section 78 of the Finance Act, 1994, which has been upheld by the impugned order. Considering the rival submissions made and after perusal of records I am convinced that the appellant has put forward a plausible explanation for the failure to pay. I find that it is a fit case for invoking the provisions of Section 80 of the Finance Act, which provides that, no penalty shall be imposable if the assessee establishes there was reasonable cause for the failure. I hold that the penalty imposed is not justified and has to be set aside. Both issues are answered in favour of the appellant.
5. In view thereof, the impugned order is set aside and the appeal is allowed with consequential reliefs, if any.
(Pronounced on 21/10/2015) (Sulekha Beevi C.S.) Member (Judicial) K. Gupta 5