CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL MUMBAI REGIONAL BENCH - COURT NO. I Service Tax Appeal No. 87651 of 2023 (Arising out of Order-in-Appeal No. SK/190/Appeals-II/MC/2023-24 dated 23.08.2023 passed by the Commissioner (Appeals-II), CGST & Central Excise, Mumbai.)

M/s. Zee Entertainment Enterprises Ltd. .… Appellant

18^th Floor, A-wing, Marathon Futurex, N M Joshi Marg, Mumbai, Maharashtra-400 013.

Versus Commissioner of CGST and Central Excise, …. Respondent Mumbai Central

4^th Floor, C. Ex building, Churchgate, Mumbai, Maharashtra-400 020.

APPEARANCE:

Shri Kishore Hingorani, Chartered Accountant for the Appellant Ms. S. Varalakshmi, Authorized Representative for the Respondent CORAM:

HON’BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

HON’BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL)

FINAL ORDER NO. A/85080/2026 Date of Hearing: 22.07.2025 Date of Decision: 20.012026 Per: S.K. MOHANTY Briefly stated, the facts of the case are that the appellants herein are engaged inter alia, in the provision of taxable services under the category of Broadcasting Services, Copyright service, Business Auxiliary Service, Renting of Immovable Service etc., defined under the Finance Act, 1994. For provision of such taxable services, the appellants got registered with the jurisdictional service tax authorities and comply with the provisions contained the statute, including payment of service tax on provision of such taxable services. During the course of audit of records under EA-2000, the audit officers in the department observed that the appellant had entered into production agreement with various programme producers for production of TV serial episodes/telefilms etc., wherein the condition had been provided that in case of delay in delivery of programme tape or master tape from the schedule delivery time, the appellants shall charge penalty as per the rate specified in the production agreement. The said penalty is termed as ‘Late Delivery Charges’ (LDC"). Upto the period March 2014, the appellants had neither collected nor paid service tax on recovery of LDC. The arrangement with the programme producer also provides that the penalty for late delivery can be waived, if the producer proves that the delay was on account of reasons beyond his control, like non- availability of actor, natural calamity, delay in approval of the script by appellants, etc. Thus, after the imposition of LDC, many program producers requested the appellants for waiver of the uplink credit recovery charges (LDC) in terms of the agreement. In such cases, penalty charges are re-negotiated and either full or part amount levied earlier is waived. The appellants had discharged the service tax liability on recovery of LDC during the period July, 2012 to March, 2014 in the month of March, 2014. The appellants had also paid service tax on LDC for the period April, 2010 to June, 2012 along with interest. The service tax was paid on the net amount of income, after waving the amount towards the LDC. On the above backdrop of the issue, the audit wing of the department had raised the objection that the appellants were required to pay service tax on value of debit note issued for recovery of LDC. The audit wing had contended that once the debit note is issued, the appellants were required to discharge the service tax liability, as per the provisions contained in Rule 3(a) of Point of Taxation Rules, 2011. Based on the audit observations, the department had initiated the show cause proceedings against the appellants, seeking for recovery of the service tax demand. The matter arising out of the Show Cause-cum-Demand Notice dated 28.12.2016 was adjudicated by the Joint Commissioner, CGST & CX, Mumbai Central vide order dated 08.06.2021, wherein demand of service tax on LDC amounting to Rs 67,28,350/- along with interest was confirmed and penalties were imposed on the appellants. On appeal against the said adjudication order dated 08.06.2021, the learned Commissioner (Appeals), CGST & Central Excis