CESTAT Kolkata Sets Aside ₹6.25 Lakh Service Tax Demand Against Radiant Advertising, Rules Extended Limitation Not Invocable

March 30, 2026 : The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, has set aside a service tax demand of ₹6,25,706 raised against M/s Radiant Advertising & Marketing (India) Pvt. Ltd., holding that the extended period of limitation was wrongly invoked and that allegations of excess CENVAT credit availment were not sustainable.

The Bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) was adjudicating Service Tax Appeal No. 75351 of 2016 arising from an Order-in-Original dated 29.12.2015, which had been upheld by the Commissioner (Appeals).

The appellant, engaged in advertising and marketing services, discharged service tax on 15% of the gross amount billed. The dispute arose on two counts: alleged non-payment of service tax amounting to ₹1,83,666 on advances received during FY 2008–09 to 2011–12, and alleged wrongful availment of CENVAT credit amounting to ₹4,06,138 due to discrepancies in ST-3 returns.

The Tribunal noted that the total advances received by the appellant amounted to ₹10,98,587, which were subsequently adjusted against services rendered, utilised for supply of goods on payment of VAT, refunded to clients, or written off in certain cases. It accepted the appellant’s contention that service tax, if at all payable, could arise only on 15% of the written-off portion of such advances.

However, the Tribunal held that even this limited liability was not sustainable as the demand was barred by limitation. The show cause notice dated 19.04.2013 covered the period from 2007–08 to 2011–12, with part of the demand extending beyond the permissible period of five years. It was observed that the demand had arisen from scrutiny of balance sheets, ST-3 returns, and other records already available with the department, thereby negating any allegation of suppression of facts or intent to evade tax.

On the issue of CENVAT credit, the Tribunal found merit in the appellant’s explanation that the discrepancy stemmed from accounting treatment of opening balances and timing differences in reporting. Upon examining the documentary evidence and reconciliation statements, it concluded that no excess credit had been availed.

Rejecting the invocation of the extended limitation period, the Tribunal held that in the absence of suppression or wilful misstatement, the extended period could not be applied. Consequently, both components of the demand—service tax on advances and alleged excess CENVAT credit—were held to be unsustainable.

In view of these findings, the Tribunal set aside the impugned order in entirety, including interest and penalties, and allowed the appeal with consequential relief.

Case Details:
Case Title: M/s Radiant Advertising & Marketing (India) Pvt. Ltd. v. Commissioner of CGST & Central Excise, Kolkata
Case No.: Service Tax Appeal No. 75351 of 2016
Coram: Ashok Jindal (Judicial Member), K. Anpazhakan (Technical Member)