2013 (11) TMI 607 - AT - Service Tax

Video Tape Production Service u/s 65(120) of the Finance Act, 1994 Waiver of Pre-deposit Held that - Apparently, the applicants are not providing the process of any recording of any programme - But, they are using computer and specialized software in relation to upgradation of post-production activity - this dispute would be looked into at the time of appeal hearing at length - Prima facie, in the applicant s own case, the Tribunal directed pre-deposit of about 25% of the demand of tax Thus, the applicant directed to submit Rupees Forty Lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal partial stay granted.

Summary

Issues:
- Whether the applicant is liable to pay tax under the category of "Video Tape Production Service" for the period Oct.'07 to Mar.'10.
- Whether the applicant's activities fall under the definition of "Video Tape Production Service" as per Section 65 (120) of the Finance Act, 1994.
- Whether the applicant's contention of not undertaking the process of recording any programme, event, or function is valid.
- Whether the activities of the applicant involving creation of images, manipulation of original images, and converting digital images to 35mm films constitute "Computerized data processing."
- Whether the pre-deposit of tax amount by the applicant was sufficient and in compliance with the Tribunal's orders.

Analysis:
1. The applicant, engaged in specialized data processing activities, filed applications for waiver of pre-deposit of tax amounting to Rs.2,03,12,946/- along with interest and penalty. The tax was demanded for the period Oct.'07 to Mar.'10 under the category of "Video Tape Production Service."

2. The main contention raised by the applicant's advocate was that the applicant does not undertake the process of recording any programme, event, or function, thus not falling under the definition of "Video Tape Production Service" as per Section 65 (120) of the Finance Act, 1994. On the contrary, the Authorized Representative argued that the applicant's activities involving creation of images, manipulation of original images, and converting digital images to 35mm films go beyond mere "Computerized data processing."

3. The Tribunal acknowledged that the dispute regarding the nature of the applicant's activities would be examined in detail during the appeal hearing. It was noted that the applicant had previously deposited 10% of the tax amount as directed by the Tribunal, which was accepted as compliance. However, the Authorized Representative contended that a modification application should not impact the compliance status.

4. After hearing both sides, the Tribunal directed the applicant to pre-deposit Rs.40 lakhs within eight weeks from the date of the judgment. The compliance report was scheduled for a specific date. The decision was made based on the submissions and considerations presented during the proceedings.

5. The judgment highlighted the need for the applicant to adhere to the pre-deposit directive, emphasizing the importance of compliance with the Tribunal's orders. The detailed analysis of the applicant's activities and the interpretation of relevant legal provisions formed the basis for the Tribunal's decision regarding the pre-deposit amount.