2024 (2) TMI 88 - AT - Service Tax

CENVAT Credit - telecast fees charged by the TV channels for telecasting them - payment of Service Tax by the appellant for telecasting their own programmes/serials - input services or not - programmes/serials produced by them are exempted from payment of Service Tax or not - HELD THAT - The dispute involved in these appeals on the issue of eligibility of CENVAT Credit is resolved and it is no more res--integra as Tribunal Chennai in RADAAN MEDIA WORKS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI 2018 (2) TMI 331 - CESTAT CHENNAI has held the appellant is not liable to discharge service tax under the category of programme producing service. The contention of the department that programmes are telecast after production of the serials etc. is flimsy and not supported by any legal basis. From the above, we conclude that the disallowance of input service credit is unjustified and requires to be set aside. The appeals are allowed.

Summary

Issues involved:
The issues involved in this judgment relate to the eligibility of CENVAT Credit on telecast fees paid by an appellant engaged in producing TV programmes/serials for their own account and for other persons. The main dispute is whether the telecast activity is solely used for exempted service or not.

Comprehensive details of the judgment for each issue:

Issue 1: Eligibility of CENVAT Credit on telecast fees:
The appellant, a media company, produces TV programmes/serials for themselves and for others. They pay Service Tax under "TV or Radio Programme Production Service" for programmes produced for others and under "Broadcasting Service" for telecasting their own programmes. The appellant sells Free Commercial Time (FCT) to advertising agencies for broadcasting their advertisements. The dispute arises regarding the eligibility of CENVAT Credit on telecast fees paid to TV channels. The Department contends that the appellant is not eligible for CENVAT Credit as the telecast fees are related to exempted services. However, the appellant argues that they are entitled to credit as the telecast fees are essential for providing the service of selling space or time for advertisements.

Issue 2: Show Cause Notice and Adjudication:
The appellant was issued a Show Cause Notice demanding repayment of CENVAT Credit availed during specific periods. After due process, the Commissioner of Service Tax confirmed the demand and imposed penalties for taking ineligible credit. The appellant appealed against this order before the Tribunal.

Issue 3: Tribunal's Decision:
The Tribunal considered the arguments of both parties and referred to its earlier decisions in the appellant's own case. The Tribunal held that the denial of CENVAT Credit on telecast fees was unjustified, as the fees were essential for providing the service of selling space or time for advertisements. The Tribunal set aside the Commissioner's order and allowed the appeals, granting consequential relief to the appellant.

This judgment highlights the importance of understanding the relationship between input services and output services for claiming CENVAT Credit. It also emphasizes the significance of judicial discipline in following precedent decisions to ensure consistency in legal interpretations.