2015 (5) TMI 983 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Broadcasting service - Held that - Applicant got the permission to up-link their own TV channels. It is noted that P&L Account for the year ending 31.3.2005 showed fees for allotment of airtime and up-linking charges separately. Thus it is clear that applicant had been collecting fees for allotment of air time. So, prima facie, we are unable to accept the contention of learned advocate that they were not rendering any service of broadcasting. It is seen from the impugned order that in the P&L Account for the year ended 31.3.2006 in the Schedule X relating to administration and other expenses, the expenses in respect of cassettes, tapes and carriage fees were shown separately. Audit party during their visit in 2010 detected collection of broadcasting charges after examining the records, therefore, prima facie ground of demand beyond the normal period of limitation cannot be accepted. - Partial stay granted.

Issues:
1. Cancellation of registration certificate under "Broadcasting Service" and subsequent registration under "Business Support Service."
2. Demand of service tax under the category of "Broadcasting Service" for the period from 2005-06 to 2009-10.
3. Nature of services provided - up-linking services or broadcasting services.
4. Applicability of time-barred limitation for the demand.
5. Validity of service of notice under Section 37(C) of the Central Excise Act, 1944.

Analysis:

1. The applicant initially obtained registration for "Broadcasting Service" in September 2002 but later requested cancellation citing they were only providing up-linking services. Subsequently, they obtained registration under "Business Support Service" from May 1, 2006. The audit in 2010 revealed income accounted under "broadcasting service," leading to a show cause notice for service tax demand, which was partly confirmed by the adjudicating authority.

2. The applicant argued that they were solely providing up-linking services, supported by permissions from the Ministry of Information and Broadcasting and agreements with other parties for up-linking services. They contended that the demand under "Broadcasting Service" was incorrect as they had been paying taxes under "Business Support Service" since May 1, 2006. They also raised issues regarding the quantification of demand, inclusion of loan reimbursements, and the time-barred nature of the demand.

3. The Revenue representative countered, pointing to the applicant's Profit and Loss Account indicating broadcasting services, permission letters for TV channels, and collected charges for airtime and up-linking. They argued that the applicant failed to provide evidence of not providing broadcasting services, asserting that the demand was justified due to the apparent suppression of facts to evade tax.

4. The Tribunal examined the permission letter allowing up-linking of TV channels and the applicant's financial records, which showed fees for airtime and up-linking charges separately. The Tribunal noted the collection of broadcasting charges during an audit and found the applicant's contentions unconvincing regarding services provided, leading to doubts on the limitation argument.

5. Regarding the service of notice, the Tribunal referred to Section 37(1)(b) of the Central Excise Act, 1944, stating that affixing the order to the premises suffices if personal service is not possible. The Tribunal ruled against the applicant's argument on this issue and directed a pre-deposit while allowing adjustments for previous payments. Compliance was set for a specified date.

This detailed analysis showcases the complexities of the case, including service categorization, tax demands, evidentiary issues, and procedural aspects, leading to a comprehensive understanding of the judgment.

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