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Landmark Service Tax Judgment - Broadcasting Services

Taxable Services - Broadcasting Services

Case Laws Related

  • STO 2013 CESTAT 1059
  • Broadcasting Agency Service: Demand on reverse charge mechanism: Only permitting the right to receive signals in any form by transmission through electromagnetic waves through space or cable to MSO/cable operators is an aspect covered as taxable and Distribution rights given by ESSD to the Appellant and which are not covered under the definition and not taxable.

  • STO 2009 CESTAT 1645
  • Service Tax: Commercial or Industrial Construction Service: The subject project was for construction of an Onshore Terminal for the purpose of receiving, processing/purification and distribution of natural gas extracted from the Godavari Basin: Scope and liability: The Onshore Terminal in question receives impure natural gas extracted from the earth beneath the sea, where it is processed and stored for distribution. CICS does not apply to work relating to certain, specified utilities viz. roads, airport, railways, transport terminal, bridges, tunnels and dams as per the exclusion in the definition of the taxable service. The argument of the appellants that the principle of "ejusdem generis" does not apply to interpret the expression transport terminal appearing in the list of items excluded from the definition of CICS is not correct. Principle of "ejusdem generis" applies in understanding the scope of transport terminal appearing in the company of facilities such as roads, railways, airport which are built and maintained by the government or municipality as found by the Commissioner. Section 65(25b) of the Act, as amended, defines the term "Commercial or Industrial Construction service". The Onshore Terminal in question constructed for storage and purification of natural gas extracted by Reliance Industries Ltd. does not appear to be. 'transport terminal' appearing in the definition of CICS. L&T argued that the work relating to various items which is excluded from the levy under CICS were disparate items with nothing in common and the principle of "ejusdem generis" or `Noscitur a sociis' did not apply. This argument is incorrect; all the items in the list are public goods and are provided by governments at different levels. Transport terminal constructed by L&T for RIL to store, purify & process extracted gas cannot be held to be public goods. It is not an item of infrastructure of public utility or civic amenity like the items in the definition of the service. ‘Transport Terminal' for OT is not covered by the exclusion.

    Therefore, the impugned activity is exigible to tax under the category of `Commercial or Industrial Construction Service' as held in the impugned order.(Para 5, 5.1, 5.2,6)

    Stay granted.

  • STO 2009 CESTAT 1539
  • Service Tax: Whether the job activity undertaken by the assessee during the period of dispute would constitute a ‘business auxiliary service’: Scope: The activity is the same as the one which was considered in the same assessee’s appeal No. ST/75/08. It was held that, by virtue of the exclusive clause contained in the definition of ‘business auxiliary service’ under Sec. 65 (19), the above activity would not amount to ‘business auxiliary service’. Therefore, manufacture and ‘excisable goods’ are two independent concepts and that it is not necessary that a process amounting to manufacture within the meaning of section 2 (f) should always result in emergence of an excisable goods and vice versa. Whether a process would amount to manufacture within the meaning of section 2 (f) has to be seen independently, based on the criteria evolved through various judgments of apex court. There may be a case, when a process may amount to manufacture under section 2 (f) but it may not result in emergence of an excisable product. If that be so, then the exclusion clause under BAS, which refers only to the activity amounting to manufacture within the meaning of section 2 (f), would still apply to such processes, whether or not the resultant product are excisable goods.(Para 2,3).

    Appeals allowed.

  • STO 2009 CESTAT 1517
  • Service Tax: Business auxiliary service: Penalty: Commissioner (Appeals) has reduced the penalty taking note of the fact that appellants discharged the tax liability with interest as soon as they came to know of the liability. Further, he has also found that appellants were acting as one of the agents of Reliance Industries Ltd. and also as distributor. Further, they were also acting as del credere agent when required by Reliance Industries Ltd. The dell credere services provided by the appellants were considered to be relating to promotion or marketing or sale of goods and held to be classifiable as business auxiliary services. This shows that appellants were not aware about their service tax liability and also the bonafide of the appellants. Further, the nature of the activity undertaken by the appellants also shows that there was room for such an opinion.(Para 1,3).

    Revenue appeal rejected.

  • STO 2009 CESTAT 1516
  • Service Tax: Business auxillary service: Scope and liability: The appellant had constructed national Highway on BOT basis as per the tripartite assignment agreement dated 29/06/2001 between National Highways Authority and CIDBI and the appellant. The Notification issued by the Ministry of Road Transport and Highways authorizes persons, who builds and transfers the highway, to collect toll tax. Ministry vide amendment Notification dt. 13/5/2009 has substituted the name of the applicant as who is authorized to collect toll tax. Such Toll tax collected is exempt from payment of Service Tax. In view of this, the Service Tax demanded on the amount of toll charges collected by the appellant does not have a strong basis.(Para 5).

    Stay allowed.

  • STO 2009 CESTAT 1515
  • Service Tax: Assessee paid commission to the said foreign agents for getting export orders: Liability: The issue involved is regarding service tax liability of the appellants as recipient of services for the commission paid by them to the agents who are staying outside India. The period involved is from July 2005 to June 2006. The decisions of Hon'ble High Court of Mumbai in the case of Indian National Shipowners Association vs. U.O.I. [2008-TIOL-633-HC-MUM-ST], followed by High Court of Delhi in the case of Unitech Ltd. vs. Commissioner of Service Tax, Delhi STO 2009 Del 877 squarely cover the issue in favour of the appellants.(Para 6).

    Appeal allowed.

  • STO 2008 CESTAT 525
  • Service Tax: CHA service: Limitation: The appellants have a case on limitation in respect of the entire demand for the period beyond the normal period of one year preceding the date of the show-cause notice.(Para 2).

    Partial pre-deposit ordered.
     

  • STO 2009 CESTAT 24
  • Service Tax: Broadcasting services: Activity of support services to WSI like assisting WSI in servicing its Indian customers, dispatching invoices to Indian customers, marketing, promotion, research, regulatory assistance and other similar types of services, collecting the subscription charges on behalf of WSI directly or through its channel partners: Scope and liability: The scope of 'broadcasting service' has been expanded with effect from 2005 and after the expansion of the scope of the 'broadcasting service', even the customers or the subscribers would come within the scope of 'client'. The 'broadcasting service' would cover even sending signals in any form including sound to the customers. Amendments have been made in the provisions relating to 'taxable service", 'broadcasting service' and 'broadcasting agency'. In the light of the amendments, Board has also issued certain clarifications. In terms of the definition of the 'broadcasting agency', if a service provider is situated outside India, then his representative agent or Subsidiary or any other person who would be acting on his behalf would also be covered by the definition of 'broadcasting, agency'. In that sense, the respondents would be liable for Service Tax.(Para 6).The provisions relating to ‘broadcasting service' had undergone amendment in 2002 and also in 2005. In the light of the amendment, even the customer or the listener in respect of the WSI would be covered as a service receiver or a client and the subscription charges collected would definitely be taxable. In this connection, Board's  Circular F.No.B1/6/2005-TRU dated 27.7.2005. issued in the light of the amendment is clarificatory. The scope of the term client has been defined in Board's Circular F.No.B.11/1/2001-TRU dated 9.7.2001, the same has not been withdrawn. Therefore, the department is bound to follow it. Since the matter is one of interpretation, penalties are not at all justified. However, the appellant is liable to pay the Service Tax and the interest under the category of 'broadcasting services’. The cum-tax benefit should also be extended. For this limited purpose, Original Authority may re-compute only the tax liability and collect the same. (Para 8,9).

    Revenue appeal allowed except above.

  • STO 2008 CESTAT 425
  • Service Tax: Stay/Dispensation of pre-deposit: Cargo Handling service: The facts relating to “Cargo Handling Services” require a closer study, which can be had at the final hearing stage. For the present, the benefit of doubt to the appellants is given in respect of some of the activities considered by the Commissioner for levy of service tax from the appellants in the category of “Cargo Handling Service”. In respect of certain other categories such as bulk-breaking, the appellants seem to have failed to make out a prima facie case.(Para 2).

    Partial pre-deposit ordered.

  • STO 2008 CESTAT 432
  • Service Tax: Waiver of pre-deposit: Demand:The differential demand of service tax is on account of denial of the benefit of Notification No. 12/03-S.T., dated 20-6-2003 whereunder no service tax was payable on the value of goods and materials sold in the course of rendering of Maintenance and Repairs Service and Installation and Commissioning Services. The benefit of the aforesaid Notifications was denied on untenable grounds. After considering the submissions, there is a prima facie case for the appellants. Apparently, the benefit of Notification No. 12/03-S.T., dated 20-6-2003and Notification No. 13/03-S.T.. was admissible to the assessee.(Para 2,3).

    Pre-deposit waived.

  • STO 2007 CESTAT 1363
  • Cable Operator : The cable operator actually receives signals and transmits or retransmits the same to the customers or his clients. There is no legal sanction for splitting the amount collected from the subscriber in the form of a taxable amount towards taxable service and non taxable service. CBEC Clarification dt.9.6.2006 not applicable to cable operators. As the appellant was under a bonafide belief that he was not required to pay service tax on the amount collected towards pay channels, the penalties imposed are not warranted.

  • STO 2007 CESTAT 631
  • Service Tax: Business Auxiliary Service: Scope and liability: The service rendered by the appellants on behalf of the railway administration to AC-2 tier/3 tier passengers in the specified trains was in the nature of a 'customer care service' inasmuch as, the passengers were customers of the railways and for the services rendered by the appellants, they were rewarded by the railways. However, in regard to the services rendered by the appellants to the first class passengers, they were receiving consideration directly from the passengers albeit at the rate prescribed by the railways. In respect of this part of the service in question, the revenue is yet to establish that it is a 'customer care service provided on behalf of the client'. The appellants have not succeeded in taking their service out of the purview of 'customer care service provided on behalf of the client', one of the business auxiliary services specified under section 65 (19). (Para 3).

    Pre-deposit ordered.

  • STO 2007 CESTAT 1305
  • Stay: Broadcasting Service: Inner part of section 65(14) is applicable only where the broadcasting agency or organization has its Head Office situate in any place outside India during the period of dispute. It is claimed by the appellants, neither they nor the broadcasting company had any office outside India. Prima facie case made out.

  • STO 2007 CESTAT 749
  • Service Tax: ESS services: Scope and liability: Benefit of exemption Notification not claimed initially, was not barred, prohibited or estopped from claiming such a benefit at a later stage: Before the original authority, the assessee did not claim any exemption from payment of tax. But, before the first appellate authority, they claimed such exemption under clause (c) of Notification No. 25/2004-ST, dated 10-9-2004, which had exempted the value of Business Auxiliary Service from payment of tax for the period prior to 10-9-2004. This claim was rejected by learned Commissioner (Appeals). In the present appeal, the assessee has abandoned the above claim and has claimed the benefit of clause (d)(iii) of the Notification. In support of this belated claim, learned counsel has relied on the apex court's judgment in National Thermal Power Co. Ltd. v. CIT STO 1996 SC 9 wherein the Tribunal was held to have jurisdiction to examine a question of law which had not been raised before lower authorities. Reliance has also been placed on the Apex Court's judgment in Share Medical Care v. Union of India STO 2007 SC 1329, wherein it was held that the assessee, who had not claimed the benefit of exemption Notification initially, was not barred, prohibited or estopped from claiming such a benefit at a later stage. In view of the case law cited by counsel, the assessee's claim for exemption under clause (d)(iii) of the above Notification needs to be examined by the original authority in accordance with law.(Para 1,2).

    Appeal allowed by way of remand.

  • STO 2007 CESTAT 8
  • Service Tax: Broadcasting: Taxable value: Service tax can be charged only with respect to broadcasting charges and not with respect to reimbursable expenses, as per Trade Notice No. 7/98-S.T. dated 13-10-1998 issued by the Mumbai Commissionerate. They had produced documentary evidence to support the contention that they had incurred certain expenses on behalf of their clients, which were being reimbursed to them by their clients and, therefore, the quantum of tax is required to be reduced, as no service tax is payable on that part of the bills pertaining to expenses incurred by them and recovered from their clients. Commissioner has recorded a finding that in the absence of the documentary evidence in support of the stand of having incurred expenses on behalf of their clients, which expenses were reimbursed, on actual basis, are not applicable. Case remitted to the adjudicating authority for fresh decision (Para 3).

    Appeal allowed by way of remand.

  • STO 2007 CESTAT 472
  • Service Tax: Sale of space/time slot for advertisement: Scope and liability: The provision for levy of duty shows that 'multi system operator' was introduced only from 10-5-2004 under Section 65(105). The selling of time slot also became taxable subsequent to the period of demand.(Para 4,5).

    Pre-deposit waived, stay allowed.

  • STO 2006 CESTAT 385
  • Service Tax: Broadcasting Service: Penalty: Having registered with the department, the appellant was aware of its liability to pay service tax. As such, the benefit available under Section 80 of the Finance Act, in respect of reasonable cause, cannot be extended to the appellant. Financial crisis cannot be considered to be a factor constituting "reasonable cause" as envisaged in terms of the said Section 80 of the Act. However, taking into account the fact of payment of tax before the issuance of the show cause notice and interest personal penalty is reduced(Para 4).

    Appeal partially allowed.
     

  • STO 2006 CESTAT 161
  • Service Tax: Adjustment in the service tax payable: Cenvat irregularity: Department had never refused for a single registration. The appellant wanted only fresh registration for business auxiliary service and this was duly accorded. Rule 3 of Service Tax Credit Rules and the proviso to the said rule which reads as :-"Provided that the differential service provider shall be allowed to take such credit on or after the date on which he makes payment of the value of input service and the service tax paid or payable as indicated in the invoice or bill or challan referred to in sub-rule (1) of Rule 5." Rule 4 is very clear and is restrictive in the sense that the credit shall be utilized only to the extent, such credit is available on the last day of the month. In view of these statutory provisions, the appellants were not eligible for taking the credit. At the time of availment of credit, no payment was made by the appellants to that effect. Applicant have taken service tax credit without following the proper procedure as laid down under the Rules. We therefore, find that the applicant have not made a fit case for waiver (Para 6,7).

    Pre-deposit ordered.

  • STO 2005 CESTAT 135
  • Broadcasting Agency Service: Predeposit: In view of earlier orders, the application for waiver of pre-deposit of service tax and penalties is allowed. Treating applicants as broadcasting agencies, prior to 16-7-01 when service tax became specifically leviable on broadcasting services.

  • STO 2005 SC 201
  • Service Tax: Broadcasting Services: Interest: Retrospective effect: It is well established that while it is permissible for the legislature to retrospectively legislate, such retrospectivity is normally not permissible to create an offence retrospectively. There were clearly judgments, decrees or orders of courts and Tribunals or other authorities, which required to be neutralised by the Validation Clause. The Explanation to the Validation Section says that no act or acts on the part of any person shall be punishable as an offence which would have been so punishable if the Section had not come into force. The liability to pay interest would only arise on default and is really in the nature of a quasi-punishment. Such liability although created retrospectively could not entail the punishment of payment of interest with retrospective effect. The section expressly makes the assessee liable under the amended provision to pay the tax within the period of 30 days from the date of the Presidential Assent to the Finance Bill, 2002. In the circumstances, the appellant was entitled to a period of thirty days thereafter to make payment of the tax. Needless to say, if it did not make payment within thirty days from the 11-5-2002, it would be liable to pay interest at the rate specified after that date. (para 7,8,10)

  • STO 2004 CESTAT 138
  • Service Tax: 'Taxable service' as defined under Section 65(72): Broadcasting Services: Scope and Liability: Finance Act, 2002 made amendments to the provisions relating to broadcasting with retrospective effect from 16th July, 2001. Meaning given to the word "disseminate" in all the dictionaries referred by the appellants would clearly show that unless the information or knowledge reaches the receiving end dissemination will not be complete. Meaning given to the word "dissemination" in Indian Edition 2001 the New Oxford Dictionary is 'spread or disperse (something especially information) widely'. Therefore, when the television programme and advertisements in the form of signals are encrypted and beamed from outside India and telecast outside India but are received in India through decoders by Multi System Operators and Cable TV operators, it would come within the meaning of definition of "broadcasting" under Section 2(c) of Prasar Bharati Corporation Act, 1990. Under the amended definition, the word "broadcasting" includes programme selection, scheduling or presentation of sound or visual matter on a radio or a television channel that is intented for public listening or viewing, as the case may. In the case of broadcasting agency or organisation, having its head office situated in any place outside India, the activity of selling of time slots or obtaining sponsorships for broadcasting of any programme or collecting the broadcasting charges on behalf of the said agency or organisation, by its branch office or subsidiary or representative in India or any agent appointed in India or by any person who acts on its behalf in any manner are also brought under net of the term "broadcasting". The appellants are engaged in the activity of selling of time slots or obtaining sponsorships for broadcasting of any programme and are collecting broadcasting charges on behalf of ATL/EXPAND/STAR. The entire amount paid by the advertiser/sponsorer to ATL/Expand/Star has to be treated as value of Taxable Service. (Para 9,10).

    Appeal disposed off.

     
     

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