M/S. Dentsu Creative Impact Pvt. Ltd vs C.S.T.-Service Tax-Delhi

[Arising out of Order-in-Original No.53/ST/DLH/2014 dated 14.03.2014 by the Commissioner of Central Excise & Service Tax (Appeals), New Delhi].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should 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 Departmental authorities?

M/s. Dentsu Creative Impact Pvt. Ltd. .Appellants

Vs.

C.S.T.-Service Tax-Delhi .Respondent

Appearance:

Shri S.K. Pahwa, Advocate for the Appellants

Shri. A.K. Dhawan, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 21.01.2015

FINAL ORDER NO.50264/2015-ST(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order for confirming the demand of Service Tax on the services availed by the appellant from outside India under reverse charge mechanism and interest and penalty under section 78 of the Finance Act is also imposed.

2. The facts of the case are that appellant is provider of output services under the category of advertisement. For providing their output service, they procured certain services from outside India as the appellant is provider of output services. Therefore, whatever services they procured from outside India they are required to pay on the service under reverse charge mechanism under section 66 A of the Finance Act. The appellant did not pay service tax for the period 2009-2010. Thereafter, the show cause notice dated 04.09.2012 was issued to them to demand the Service tax along with interest and imposition of penalty by the impugned order. The demand of service tax was confirmed along with interest and penalty under section 78 of the Act was imposed. Aggrieved from the said order appellant is before me.

3. The Ld. Commissioner for the appellant submits that it is the admitted fact that they did not pay service tax under reverse charge mechanism. But as appellant is provider of output service whatever services tax they have paid they are entitled to take Cenvat Credit on the same. Therefore, relying on the decision of the larger bench of this Tribunal the case of Jay Yuhshin Ltd. Vs. C.C.E. New Delhi-2000 (119) E.L.T. 718 (Tri-LB) as there is a revenue neutral situation in that case demand on service tax is not sustainable. Consequently, penalty is also not imposable. He further submits that as show cause notice has been issued to them by invoking extended period of limitation, therefore, it being a revenue neutral situation the extended period of limitation is not invokable as held by this Tribunal in the case of Accurate Chemicals Industries Ltd. Vs. C.C.E. Noida-2014 (300) E.L.T. 451 (Tri Del). Therefore, impugned order is to be set aside and appeal be allowed.

4. On the other hand Ld AR opposes the contention of the Ld. Counsel and submits that as the appellant were required to pay service tax under section 66A of the Act which they have not paid. Therefore, claiming of credit at the same does not arise. In these circumstances, revenue neutral situation is not applicable and they are required to pay service tax.

5. Heard the parties. Considered the submissions.

6. It is admitted position that if appellant had paid the service tax on import of these services under reverse charge mechanism they were entitled to take Credit on the same immediately. Therefore, relying on the decision of this Tribunal in the case of Jay Yuhshin Ltd. (Supra) I hold that it is the revenue neutral situation and in that case if appellant has not paid the service tax they have not taken the credit on the same. Further I find that in the case show cause notice has been issued by invoking extended period of limitation and in the case of Accurate Chemicals Industries Ltd. (Supra) this Tribunal held that in the case of revenue neutral situation extended period of limitation is not invokable.

7. In these circumstances, I hold that appellant are not required to pay service tax. Therefore impugned order is set aside. Appeals are allowed with consequential relief if any.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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ST/52475/2014-ST(SM)