Commissioner of CGST Vs Sony Pictures Networks India Pvt. Ltd. (Bombay High Court)
The Bombay High Court dismissed the Revenue’s appeal against the CESTAT, Mumbai order dated 18 December 2019, which had allowed the respondent assessee’s claim for CENVAT credit of input services used in connection with broadcasting services. The Revenue had initially proposed four substantial questions of law concerning whether the services qualified as “input services” under Rule 2(1)(i) of the CENVAT Credit Rules, 2004, whether credit could be availed on Rent-a-Cab, Outdoor Catering and Club or Association services excluded from the definition with effect from 1 July 2012, whether payment of service tax without authority of law could entitle the assessee to CENVAT credit, and whether the Tribunal’s order was unreasoned. At the hearing, the Revenue pressed only questions (b) and (c).
The respondent was registered with the Service Tax Authorities for broadcasting, TV or radio programme production, sound recording, advertising and related services. During audit, the Revenue alleged that the assessee did not have a physical establishment for providing taxable broadcasting services while availing CENVAT credit on input services. Show cause notices dated 1 April 2015 and 21 April 2015 were adjudicated by the Commissioner of Service Tax, Mumbai-VI on 27 April 2016, resulting in disallowance of CENVAT credit, recovery of interest and imposition of penalty. The assessee appealed to CESTAT, which allowed the appeal.
