INDIAGAMES LTD. Vs. COMMISSIONER OF SERVICE TAX, MUMBAI

JUDGEMENT

(1.) THE appeal and stay petition are directed against Order -in -Original No. 70/S.T. -II/RS/2013, dated 20 -11 -2013 passed by Commissioner of Service Tax -II, Mumbai. Vide the impugned order, the adjudicating authority has confirmed a Service Tax demand of Rs. 31,96,755/ - along with interest thereon against M/s. Indiagames Ltd. by classifying the services received by them under "Intellectual Property Rights Service" (IPRs) as defined under Section 65(105)(zzr) read with Section 65(55a) and Section 65(55b) of the Finance Act, 1994. Aggrieved of the same, the appellants are before us. The learned Counsel for the appellant submits that the appellant, M/s. Indiagames Ltd., entered into a licence agreement with the Universal Studio Licensing LLLP, California, USA. As per the said agreement, the appellants were permitted to use the Universal property in the name and likeness of the legendary martial artist known as "Bruce Lee" as embodied in the visual images supplied to Licensee by Universal. The appellants used the said images in mobile games. For the right to use the said universal property, the appellant paid royalty to the service provider. The learned Counsel submits that the property which are visual images come under the category of "Copyright" as defined in Copyrights Act and IPR services, specifically excludes copyrights from its purview. Therefore, the question of payment of any Service Tax on the copyrights received from abroad does not arise. The learned Counsel further submits that the appellant has been discharging Service Tax on the royalty payment under the category of "development and supply of mobile content service" as defined under Section 65(36c) with effect from 1 -6 -2007, which includes development and supply of mobile value added services, music, movie clips, screen savers wallpapers, mobile games, data, whether or not aggregated, information, news and animation films and payment of Service Tax under the said category has not been disputed by the department. The learned Counsel also submits that demands are time barred inasmuch as the show cause notice has been issued only on 20 -10 -2009 demanding the service for the period 10 -9 -2004 to 30 -9 -2007. He also submits that neither in the show cause notice nor in the impugned order, there are any proposal or findings as to under what category of IPRs the property received by the appellant falls. Therefore, he submits that the impugned order is not sustainable in law and the same be set aside by allowing the appeal.

(2.) THE learned Additional Commissioner (AR) appearing for the Revenue fairly submits that neither in notice nor in the impugned order the category of IPR under which the property falls has been specified. Nevertheless, he reiterates the findings of the adjudicating authority and submits that the property received by the appellant in the images of "Bruce Lee" would fall under IPR services and hence, the appellant is liable to tax on reverse charge basis with effect from 18 -4 -2006 onwards. We have carefully considered the submissions made by both the sides.