Custom, Excise & Service Tax Tribunal
M/S Panchsheel Communication Network ... vs Cst, New Delhi on 27 July, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH-160017 SINGLE BENCH COURT NO.1 Appeal No. ST/57904/2013 [Arising out of the Order-in-Appeal No. 70-ST-DLH-2013 dated 28.02.2013 passed by the CCE (Appeals), New Delhi] Date of Hearing/Decision: 27.07.2017 For Approval & signature: Honble Mr. Ashok Jindal, Member (Judicial) M/s Panchsheel Communication Network Pvt. Ltd. Appellant Vs. CST, New Delhi Respondent
________________________________________________ Appearance Ms. Krati Somani, Advocate- for the appellant Shri. A.K. Saini, AR- for the respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO: 61362 / 2017 Per Ashok Jindal:
The appellant in the present case is only praying for waiver of penalty imposed on them under Section 77 and 78 of Finance Act, 1994. Briefly stated, the appellants are engaged in providing service to M/s Siti Cable Network Ltd. in connection with distribution of television signals etc. Basically, they are involved in preparing local programmes for the network, entering into agreement with franchisees (local cable operators) and ensuring compliance with various local laws with reference to distribution of television signals. Proceedings were initiated against them which resulted in confirmation of service tax liabilities of Rs. 14,59,805/- against the appellant and imposition of penalties under Section 77 and 78 of Finance Act, 1994. The appellants have paid the service tax either by cash or by debiting in Cenvat credit account, alongwith interest for delayed payment. They are not contesting the tax liability in the present appeal. As stated above, the prayer is only to waive the penalties imposed on them invoking the provisions of Section 80.
2. The learned Counsel appearing for the appellant submitted that as per the statutory definition they may not fall under the category of cable operator service. Neither they are receiving signals nor are involved in distribution of such signals. In fact, they are operating as a intermediatory between the MSO, M/s Siti Cable and the franchisee namely a local cable operator. However, having discharged the service tax liability and availing credit for various inputs/services, presently they are not pressing against the tax liability. The learned Counsel submitted that considering the scope of work undertaken by them it is apparent that they had a bonafide belief regarding non-liability to tax as the services may not fall under the category of cable operator service. He also relied on the decision of the Tribunal in Krishana Satellite Cable Network vs. CCE, Jaipur reported in 2008 (12) S.T.R. 605 (Tri. Del.), Ice Network Pvt. Ltd. vs. CST, Bangalore reported in 2010 (20) S.T.R. 59 (Tri. Bang.). It is his submission that in these cases the Tribunal held that penalties can be set aside on the appellants invoking the provision of Section 80. It is submitted that the appellant is better placed compared to the appellants in the said decided cases, as they are not actually acting as cable operators.
3. The learned AR reiterated the findings of the lower Authorities.
4. I have heard both the sides and perused the appeal records. As noted above, the tax liability is not in dispute. It appear that the scope of activities undertaken by the appellant is not falling under generally understood activities of cable operator who is involved in distribution of television signals to various clients. Admittedly, the television signals received from satellite is managed and handled through various layers of persons/ activities till it reaches the ultimate customer. The appellants role is as an intermediatory and apparently there could be a bonafide belief on their part regarding the tax liability under the said category. As already noted that they are not acting as a local cable TV operator in transmitting signals to the clients. Neither they are involved in receiving satellite signals as a MSO. The Finance Act, 1994 borrows the definitions of Cable operator and Cable service from Cable Television Network (Regulation) Act, 1995. Considering scope of definition under Section 2 (aa) of the said Act there is a possibility of bonafide belief for non-tax liability. Considering the ratio followed by the Tribunal in the above mentioned cases and also considering the facts of the present case, I find that it is a fit case for invoking the provision of Section 80 for waiver of penalties imposed on the appellant. Accordingly, the penalties are set aside and the appeal is allowed only to that extent.
(Dictated and pronounced in the open court) Ashok Jindal Member (Judicial) rt 1 ST/57904/2013