ESPN SOFTWARE INDIA (P) LTD. Vs. CST

JUDGEMENT

(1.) THESE are three appeals two filed by M/s. ESPN Software India Pvt. Ltd. (hereinafter referred to as Appellant No. 1) and one filed by M/s. Turner International India Pvt. Ltd. (hereinafter referred to as Appellant No. 2). Since the issue involved is common, these are being taken up together for decision. Appellant No. 1 has filed Appeal No. ST/1301/2011 and ST/279/2012 against Order -in -Original No. 49/2011 dated 31.3.2011 and 18/2011 dated 29.11.2011 respectively both passed by the Commissioner of Central Excise, LTU, New Delhi. Appellant No. 2 has filed Appeal No. ST/56999/2013 against Order -in -Original No. 1 -4/GB/13 dated 10.1.2013 passed by Commissioner of Service Tax, New Delhi. Brief facts of the case in Appeals of Appellant No. 1 are that Appellant No. 1 is wholly owned subsidiary of ESPN (Mauritius) Limited and is engaged in import, promotion, marketing, distribution and sub -distribution of the international ESPN network programming service (ESPN channels), STAR Sports Network programming service (STAR Sports Channel) and STAR Cricket network programming service (STAR Cricket Channel) in India through Cable TV Net work, satellite master antenna and DTH platforms received via satellite. ESPN is also engaged in the business of purchase of Advertisement Time Inventory on these channels and for further sale of Ad -time to third party advertisement in India. On the basis of an intelligence that ESPN was making substantial payment to foreign based broadcasters namely ESS Distribution (Mauritius) SNC at Compagnie, Mauritius (hereinafter referred to as ESSD) ESPN STAR Sports Mauritius SNC at Compagnie, Mauritius (hereinafter referred to as ESSM) towards import of broadcasting services namely TV channel Distribution Rights and purchase of Advertising Time Inventory in respect of ESPN, STAR Sport and STAR Cricket Channel but is not paying any service tax under the reverse charge mechanism, on the consideration paid to foreign based broadcasters towards import of such broadcasting services, investigations were taken up by Directorate General of Central Excise, Intelligence (DGCEI).

(2.) ESPN had entered into an agreement effective from 1.4.2003 and expiring on 31.3.2004 and automatically renewable for successive period of one year and other agreement dated 22.2.2008 (effective from 11.11.2005 and expiring on 31.3.2011) for distribution rights of ESPN channel. Similarly ESPN has entered into various agreements with ESSM in respect of distribution rights for STAR Sports Channel and STAR Cricket Channel. Agreements dated 1.4.2003 (for the period 1.4.2003 to 31.3.2004) automatically renewable for successive periods of one year and agreement dated 22.2.2008 (for the period 11.11.2005 to 31.3.2011) were for distribution rights of STAR Sports Channel. Agreement dated 1.4.2007 (for the period 1.4.2007 to 31.3.2012) was for distribution rights in respect of STAR Cricket Channel. ESPN has also entered into agreement with ESSD and ESSM for purchasing Advertisement Time Inventory. These agreements were dated 1.4.2004 (for the period 1.4.2004 to 31.3.2005) automatically renewable for further term of one year each and agreement dated 22.2.2008 (for the period 11.11.2005 to 31.3.2011 and agreements dated 1.4.2007 (for the period of one year) between ESPN and ESSM in respect of STAR Sports and STAR Cricket Channel.

(3.) BRIEF facts of the case in respect of M/s. Turner International India Pvt. Ltd. (hereinafter referred to as TIIPL) are that the appellant is subsidiary of M/s. Turner Broadcasting System Asia Pacific, Inc., Hong Kong (TBSAP) and is engaged in import, promotion, marketing, distribution and sub -distribution of rights to the products of Time Warner Group of Companies to cable and broadcast entities, distribution of television programming services operated by Turner Entertainment Networks Asia (TENA) and Cable News Network (CNN), LP, LLLP for entertainment and news channels to customers and procurement of advertisement sales; distribution of television programming services (HBOSA) operated by HBO Pacific Partner, Netherlands (HBOPP) to customers and procurement of advertisement sales and production, display and related support services of TV programmes. An intelligence was gathered that Appellant No. 2 is evading service tax payable on various services and investigations were taken up by DGCEI.