2012 (6) TMI 692 - AT - Service Tax

Cable Operators Service - re-transmission of TV signals to various cable subscribers - SCN issued for recovery of service tax and and also for commission received from their signal supplier under the category of Business Auxiliary Service - assessee contended that if the services of signal received by them is considered as input service , their tax liability will be nil - Held that - If the appellants had paid the service tax for obtaining signal from their service provider they are entitled for input service credit. If the service tax has been paid by the appellants on input service is equal to the service tax liability, the same has to be verified from the records of the appellants. In view of aforesaid, matter is remitted back to the adjudicating authority for fresh adjudication. Further, appellant is directed to pay interest on admitted under the category of Business Auxiliary Service and Renting of Immovable Property Services .

Summary

Issues:
1. Appellants appealing against impugned order for service tax liability.
2. Additional evidence application filed by the appellants.
3. Tax liability on commission received from signal supplier.
4. Tax liability on 'Business Auxiliary Service' and 'Renting of Immovable Property Service'.
5. Entitlement to input service credit.
6. Direction for fresh adjudication and production of relevant records.
7. Liability to pay interest on admitted service tax liability.

Analysis:
The appellants, operating as Multi Service Operator in TV cable operation business, appealed against the impugned order for not paying service tax on commission earned from retransmitting TV signals. The show-cause notice included demands for service tax on commission received from the signal supplier and on 'Business Auxiliary Service' and 'Renting of Immovable Property Service'. The Tribunal decided to send the matter back to the adjudicating authority for fresh adjudication. The appellants claimed they were unaware of the tax liability as they paid service tax to the signal supplier. The Tribunal noted that if service tax was paid for obtaining the signal, the appellants could be entitled to input service credit, directing them to produce relevant records. The appellants were instructed to pay interest on admitted service tax liability and report compliance by a specified date, with the adjudicating authority to consider input service credit and issue an adjudication order accordingly.

This judgment highlights the importance of proper tax compliance in service-related businesses and the significance of documenting and proving tax payments to claim input service credit. The Tribunal's decision to remand the matter for fresh adjudication underscores the need for a thorough review of records and adherence to tax regulations. The direction to pay interest on admitted tax liability emphasizes the consequences of delayed compliance and the obligation to fulfill financial obligations promptly.