COXSWAIN TECHNOLOGIES LTD. Vs. COMMR. OF SERVICE TAX

JUDGEMENT

(1.) THE relevant facts of the case, in brief, are that in the month of September, 2002, the applicant obtained registration from the Service Tax Department for payment of tax under the "Broadcasting Service". By letter dated 29 -10 -2004 addressed to the Deputy Commissioner of Service Tax, the appellant requested for cancellation of registration certificate on the ground that they were only undertaking uplinking services for which there was no service tax levy. As per the advice of their counsel, the applicant had again obtained registration under the category of "Business Support Service" w.e.f. 1 -5 -2006. Since September, 2006, the applicant is filing returns. In 2010, the audit party visited the applicant's premises. During scrutiny of the records, the said officers found that the applicant accounted the income under the head of "allotment of airtime and uplink income" covered under the category of "broadcasting service", came into effect from 16 -7 -2001. Accordingly, a show cause notice dated 22 -10 -2010 was issued proposing demand of service tax of Rs. 1,03,34,893/ - for the period from 2005 -06 to 2009 -10 along with interest and penalty under the category of "Broadcasting Service". The adjudicating authority, after taking into account the service tax already paid by them, confirmed demand of tax of Rs. 78,38,768.00 along with interest and penalty. Ld. Advocate on behalf of the applicant submits that they were rendering the uplinking service. They obtained permission to uplink TV channels issued by the Ministry of Information and Broadcasting. He drew the attention of the Bench to letter dated 3 -6 -2003 issued by the Asst. Director (INSAT), Ministry of Information & Broadcasting. He also drew the attention of the Bench to Board's Circular dated 9 -7 -2001 whereby it is clarified that uplinking of the programme to the satellite is done through BSNL or other earth stations located in India or through other agencies located abroad. The uplinking agencies are not broadcasting agencies and not liable to levy of service tax. He submits that as per the accounting standards in their Profit & Loss Account, they have mentioned it as broadcasting income, which is actually uplinking charges. He drew the attention of the Bench, the agreements between the applicant and M/s. Mindscape Creation P. Ltd. and M/s. Fortune Media P. Ltd. for digital uplinking of its TV channels who paid service tax under "Broadcasting Service". It is also submitted that both the agreements were entered in 2003 and 2005. It is further submitted that right from the beginning, they were not rendering any broadcasting service and therefore demand is not sustainable. He submits that they have paid service since 1 -5 -2006 under the category of Business Support Service. It is further submitted they paid Rs. 4,90,003/ - which was not appropriated by the adjudicating authority and the demand is not properly quantified. It is also contended that reimbursement of loans were included in the demand. It is further submitted that entire demand is time -barred as there is no suppression of facts with intent to evade payment of tax. It is submitted that notice was served beyond the extended period of limitation of 5 years. It is submitted that notice was served on 24 -10 -2010 by affixing outside the office premises on Sunday which is not a valid service under the provisions of Section 37C of the Central Excise Act, 1944.

(2.) ON the other hand, ld. Authorised Representative on behalf of Revenue reiterates the finding of the adjudicating authority. She submits that the applicant in their Profit & Loss Account declared that they have rendered the broadcasting service. She further drew the attention of the Bench to permission letter at pages 43 and 44 of appeal paper book, wherein it is clearly stated that applicant was owning two TV channels under name and style of "SS Music" and "Sur Sangeet". She further submits that Profit and Loss Account showed that they have collected airtime charges and uplinking charges. She further submits that they have failed to produce any evidence that they have not rendered broadcasting service. She particularly submits that P&L Account and permission letter would disclose that they were rendering broadcasting service through their two TV channels. She submits that during the relevant period, they rendered broadcasting service in the disguise of uplinking services which is supported by the permission letter and P&L Account, and it is a clear case of suppression of fact with intent to evade payment of tax.