Custom, Excise & Service Tax Tribunal
Sahara India Tv Network vs Noida on 5 July, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
REGIONAL BENCH : ALLAHABAD
COURT No. I
APPEAL No.ST/59755/2013-CU[DB]
(Arising out of Order-in-Original No. 08/Commissioner/Noida/2013-14
dated 17/06/2013 passed by Commissioner of Customs, Central Excise &
Service Tax (Appeals), Noida)
M/s Sahara India TV Network Appellant
Vs.
Commissioner of Customs, C.E. & S.T., Noida Respondent
Appearance:
Shri S.S. Gupta, Chartered Accountant & Ms Santosh Khandelwal, Representative for Appellant Shri Pawan Kumar Singh, Supdt (AR), for Respondent CORAM:
Hon'ble Smt. Archana Wadhwa, Member (Judicial) Hon'ble Mr. Anil G. Shakkarwar, Member (Technical) Date of Hearing : 28/06/2018 Date of Pronouncement : 05/07/2018 FINAL ORDER NO-71339/2018 Per: Anil G. Shakkarwar The present appeal is directed against Order-in-Original No. 08/Commissioner/Noida/2013-14 dated 17/06/2013 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Noida.
2. The brief facts of the case are that the appellants were providing services under the category of „Broadcasting Services‟. They were registered with Service Tax Department. 2 APPEAL No.ST/59755/2013-CU[DB] They received following services from the service providers located outside India, who did not have any office in India:-
Sl. Name of Service Detail of Service Service No. Provider Provided Category
1. M/s. Asia Satellite Provided C-Band "Business Telecommunication Transponder on Support Service"
Company Ltd., Asiasat 3S Satellite as defined in 19/F, Sunning Section 65 (105) Plaza, 10 Hysan (zzzq) of the Avenue, Causeway Finance Act, Bay, Hongkong 1994 (here-in-
(here-in-after after referred to
referred to as as the „Act‟
"Asiasat")
2. M/s. Rackspace Managed Hosting -do-
Asia Ltd., Services
Hongkong (here-in-
after referred to as
"Rackspace")
3. M/s. Associated Providing News "Permitting use
Press Television Feeds in the form of of Copyright in
News Limited, Oval Cinematography Cinematographic
Road, Comden Films Films and
Lock, London Sound
(here-in-after Recording" as
referred to as defined in
"APTNL") Section 65 (105)
(zzzzt) of the Act
4. M/s. Sports News -do- -do-
Television, Media
House, 3
Burlington Lane,
London (here-in-
after referred to as
"SNTV")
5. The AssociatedRight to use the „AP "Information
Press Ltd., 12
Electronic News Technology
Norwich Street,
Production System‟ Software
EC4A 1BP, London Service" as
(here-in-after defined in
referred to as Section 65 (105)
"TAPL") (zzzze) of the Act
6. M/s Harris Canada Maintenance, repair „Management, Systems, Inc, 25 and technical Maintenance Dyas Road, North support in respect of and Repair York, Ontario, equipments Service‟ has Canada (here-in- been defined in after referred to as the Section 65 "Harris") (105) (zzg) of the Act
7. M/s. Leitch Maintenance, repair -do-
Technology and technical International Inc., support in respect of 3 APPEAL No.ST/59755/2013-CU[DB] 150, Ferrand equipments Drive, Suite 700, North York, Ontario, Canada (here-in-after referred to as "Leitch")
8. M/s Omnibus Maintenance, repair -do-
Systems Limited, and technical
Stanford House, support in respect of
Stanford-on-Soar, equipments/software
Loughborough,
England (here-in-
after referred to as
"Omnibus")
9. M/s. VIZRT Maintenance, repair -do-
Limited, Shefayim and technical
Commercial support
Centre, P. O. No.
10, Shefayim,
Israel (here-in-after
referred to as
"Vizrt")
10. M/s. Snell & Maintenance, repair -do-
Wilcox Limited, and technical
Southleigh Park support
House, Eastleigh
Road, Havant,
Hants, U. K. (here-
in-after referred to
as "Snell")
11. M/s. IRDETO Maintenance, repair -do-
Access B.V., and technical
Netherlands (here- support
in-after referred to
as "IRDETO")
12. Mr. Shoaib Malik, Appearing in TV „Promoting a
a Cricket Celebrity, program for Brand of Goods,
Pakistan (here-in- promotion Services,
after referred to as Business Entity
"Shoaib") etc.‟ has been
defined in
Section 65 (105)
(zzzzq) of the
Act.
Revenue carried out the investigations and issued show cause notice dated 24.10.2011, stating that under the provisions of Section 66A of Finance Act, 1994 read with Rule 3 of Taxation of Services (Provided from outside India and Received in India) 4 APPEAL No.ST/59755/2013-CU[DB] Rules, 2006, the said services were received by the appellant and service provider did not have any office in India and therefore, under „Reverse Charge Mechanism‟ appellants were required to pay service tax in respect of services so received.
The period for individual services varied and the period between May, 2006 to March, 2011 was covered for issue of said show cause notice. The said show cause notice contended that the appellant did not disclose the fact that they had received the taxable services from service providers located at outside India and therefore proviso to Sub-section (1) of Section 73 of Finance Act, 1994 was invoked. For the purpose of appreciation, para no.17 of the said show cause notice is reproduced bellow:-
"17. Therefore, M/s. Sahara India TV Network (A unit of Sahara India Commercial Corporation Ltd.), Sahara India Complex, C-2, 3 and 4, Sector-11, Noida are required to show cause to the Commissioner of Customs, Central Excise and Service Tax, Noida as to why-
(a) Service Tax amounting to-
(i) Rs.4,49,73,991/- (Rs.4,37,76,359/- Service Tax, Rs.8,75,307/- Primary Education Cess and Rs.3,33,325/-
Higher and Secondary Education Cess) towards Business Support Service,
(ii) Rs.3,77,773/- (Rs.3,66,770/- Service Tax, Rs.7,335/- Primary Education Cess and Rs.3,668/- Higher and Secondary Education Cess) towards Permitting use of Copyright in Cinematographic Films and Sound Recording Service,
(iii) Rs.20,22,218/- (Rs.19,63,319/- Service Tax, Rs.39,266/- Primary Education Cess and Rs.19,633/- Higher and Secondary Education Cess) towards Information Technology Software Service,
(iv) Rs.77,62,498/- (Rs.75,43,488/- Service Tax, Rs.1,50,870/- Primary Education Cess and Rs.68,140/- Higher and Secondary Education Cess) towards Management, Maintenance & Repair Service and 5 APPEAL No.ST/59755/2013-CU[DB]
(v) Rs.85,721/- (Rs.83,224/- Service Tax, Rs.1,664/- Primary Education Cess and Rs.832/- Higher and Secondary Education Cess) towards Promoting a Brand of Goods, Services, business Entity etc. Service should not be demanded from them under the proviso to Section 73 of the said Act by invoking extended period as provided therein.
(b) Interest, as applicable during the relevant period on the amount of Service Tax not paid as per para (a) above, should not be charged and recovered from them under Section 75 of the Finance Act, 1994.
(c) Penalty should not be imposed under Section 77 and 78 of the Finance Act, 1994."
3. On contest, the issue was adjudicated through the impugned Order-in-Original, wherein the Original Authority has confirmed the entire demand under extended period and imposed equal amount of penalty. Aggrieved by the said order, appellant is before this Tribunal.
4. Heard Shri S.S. Gupta, learned Chartered Accountant, Consultant, for appellant, his submissions are as follows:-
a) A demand of Rs.4,49,41,169/- under Reverse Charge was confirmed for the period from May, 2006 to March, 2011, in respect of services of C Band Transponder from Asia Satellite Telecommunication Co. Ltd. as „Business Support Service‟. Further, Business Support Service received from Rackspace Asia Ltd. for the period from April, 2010 to March, 2011 to the tune of Rs.32,822/-
was confirmed under Reverse Charge Mechanism. He has submitted that the show cause notice was issued by invoking proviso for the purpose of extended period and that the demand under extended period can be raised 6 APPEAL No.ST/59755/2013-CU[DB] only when there is intention to evade duty. The said demands were confirmed on service receiver under Reverse Charge Mechanism and that the service tax paid was admissible to the appellant as Cenvat credit and therefore, there was no intention to evade payment of service tax and therefore, demand for the extended period was not sustainable.
b) Further, he has submitted that the appellant received News from Associated Press Television News Ltd. and Sports News Television for the period from July, 2010 to March, 2011. The Original Authority confirmed the demand of Rs.3,77,773/- under the Category of Permitting use of copyright in cinematographic films and sound recording. He contended that the content was not recorded in any medium and the content was sent through internet and submitted that the service is taxable only if it is on cinematographic films and he has relied on CBEC letter no.334/1/2010 dated 26.02.2010.
c) The Original Authority Confirmed the demand of Rs.20,22,218/- for the period from May, 2008 to March, 2011 under Reverse Charge Mechanism for received service under the category of Information Technology Software Service and the nature of service was right to use of software viz. A.P. Electronic News production system provided by the Associated Press Ltd. from the 7 APPEAL No.ST/59755/2013-CU[DB] place outside India. He contended that the said service became taxable w.e.f. 16.05.2008 and the appellant had interred into agreement on 29.12.2006 for receiving the said service and since the agreement was on a date prior to the taxable entry, relying on the Final Order passed by this Tribunal in the case of M/s Denso Haryana Pvt. Ltd. reported at 2016 (42) STR 754 (Tri.- Del.), confirmation of demand is not sustainable.
d) He has further submitted that the Original Authority confirmed the demand of Rs.77,62,498/- for the period from April, 2006 to March, 2011 under Management, Maintenance or Repair Service received from Harris, Leitch, Omnibus, VIZRT, Snell and IRDETO and submitted that the said services were not taxable under Reverse Charge Mechanism before 01.03.2008 and became taxable only w.e.f. 01.03.2008 only when Import of Service Rules were amended. He has further accepted that w.e.f. 01.03.2008 the said services are taxable and for the period after 01.03.2008 he does not dispute the same.
e) He has further submitted that original authority has confirmed a demand of Service Tax of Rs.85,721/- under the category of Promoting brand of goods, services, business, entity etc. on the event of sport person Shoaib Malik appearing in a T.V. Program 8 APPEAL No.ST/59755/2013-CU[DB] during the period from February, 2011 to March, 2011 and submitted that appearing on T.V. in talk show is not for promotion of any brand and the said confirmation of demand is not sustainable.
5. Heard the learned A.R. for revenue, who has supported the impugned Order-in-Original.
6. Having considered the rival contentions and on perusal of records and the case law cited, we find that the show cause notice was issued on 24.10.2011 by invoking the extended period and a demand of Rs.4,49,41,169/- + Rs.32,822/- was confirmed under „Business Support Service‟ under Reverse Charge Mechanism where the appellant was entitled to credit of service tax paid and therefore, we are of the opinion that there was no intention of the appellant, not to pay said service tax and therefore, demand under the extended period is not sustainable. We, therefore, set aside the demand under the category of Business Support Service not covered by normal period. The appellant contended in respect of permitting use of copyright in cinematographic films and sound recording that the contents were not recorded on any medium and the same was sent through Internet. We do not find the submission of the appellant to be sustainable under the said letter issued by CBEC dated 26.02.2010. Therefore, we do not interfere with the confirmation of said demand of Rs.3,77,773/-. We have further gone through the finding of 9 APPEAL No.ST/59755/2013-CU[DB] this Tribunal, relied upon by the appellant and find that the same have no application on the facts of present case. We find that the agreement for Information Technology Software Service in the nature of right to use software was entered into on 29.12.2006. The said nature of activity continued beyond 16th May, 2008 till March, 2011 and revenue have raised demand only for the period for which the tax entry was introduced w.e.f. 25.06.2008. We, therefore, do not find any infirmity in the order passed by the original authority in respect of demand of Rs.20,22,218/-. In respect of Management, Maintenance or Repair Service, we find that the appellant have accepted its levy after 01.03.2008 i.e. the period after the issue of Import of Services Rules and we, therefore, do not find any force of law for confirmation of demand under the said category for the period prior to 01.03.2008. Therefore, we set aside the demand confirmed under the category of Management, Maintenance & Repair Service for the period from April, 2006 to 29.02.2008. In respect of a sports person presented to T.V. talk show, we accept the contention of appellant and set aside the demand of Rs.85,721/-. We also set aside equal amount of penalty imposed under Section 78 of Finance Act, 1994, since there was no intention to evade duty for the reason that under Reverse Charge Mechanism the appellants are entitled for credit of service tax paid under Cenvat Credit Rules, 2004. 10 APPEAL No.ST/59755/2013-CU[DB]
7. In above terms, the appeal is partially allowed.
(Pronounced in Court on-05/07/2018) (Archana Wadhwa) (Anil G. Shakkarwar) Member (Judicial) Member (Technical) akp