Dish TV India Ltd. Vs Commissioner of CGST (CESTAT Allahabad)
Material Facts
The appellant, engaged in providing broadcasting services, availed CENVAT credit on set top boxes (STBs) supplied to customers for receiving broadcast signals by treating them as “inputs” under the CENVAT Credit Rules, 2004. During audit, the Department observed that STBs, being classifiable under Chapter 85, were capital goods and therefore only 50% of the credit could be availed in the year of receipt, with the balance available in the following financial year. A show cause notice sought recovery of interest, recovery of credit, and imposition of penalty. By the impugned order, the adjudicating authority confirmed interest of ₹6,30,94,154, imposed a penalty of ₹5,000 under Rule 15A of the CENVAT Credit Rules, 2004, and set aside the demand of inadmissible credit amounting to ₹14,03,43,252.
Procedural History
Aggrieved by the Order-in-Original dated 12.01.2018 passed by the Commissioner (Audit), CGST, Noida, the appellant filed the present appeal before CESTAT Allahabad. The Tribunal noted that, after the adjudication order, the dispute before it was confined to the demand of interest based on the finding that STBs were capital goods and not inputs.
Legal Issues
The Tribunal considered:
- Whether set top boxes used by the appellant for providing broadcasting services qualified as “inputs” under Rule 2(k) of the CENVAT Credit Rules, 2004.
- Whether the appellant was entitled to avail 100% CENVAT credit on receipt of the STBs.
- Whether interest was recoverable on the credit availed.
Relevant Statutory Provisions
