2014 (9) TMI 598 - AT - Service Tax

Import of services - programme producer s service - non-residents, were required to produce audio-visual coverage of the cricket matches conducted by BCCI and the digitalized images of the coverage were uploaded for broadcasting for the viewers of the cricket match all over the world. - Held that - The services received by the appellant, BCCI from the non-resident service providers, namely, M/s. Taj TV Ltd., Dubai/Mauritius, M/s. TWI-U.K.Ltd. London, Nimbus Sports International Pte. Ltd., Singapore, M/s. Hawkeye Innovations Ltd., U.K. and IMG Media, London merit classification under programme producer s services as defined in sections 65 (86a), 65 (86b) read with 65 (105) (zzu) of the Finance Act, 1994 and the appellant is liable to pay service tax along with interest thereon on the consideration paid for the services received under the provisions of section 66A of the said Finance Act. However, the services of hotel booking and transportation received from IMG, South Africa do not fall within the scope of the said service and hence demand of service tax on this service under the category of programme producer s service is not sustainable in law. - Decided partly in favor of assessee. Extended period of limitation and levy of penalty - Held that - There has been no undue delay on the part of the department either in completing the investigation or in issue of the show cause notices. Further, we observe that though the appellant has claimed bonafide belief, no material has been placed before us, either by way of expert opinion or otherwise, as to the basis for entertaining such belief. - A belief can be said to be bona fide only when it is formed after all reasonable considerations are taken into account as held by this Tribunal in the case of Interscape Vs. Commissioner of Central Excise, Mumbai- I 2005 (9) TMI 192 - CESTAT, MUMBAI - Appellant has suppressed material facts from the department and hence, extended period of time has rightly been invoked for confirmation of service tax demand. - levy of penalty confirmed - Decided against the assessee.

Issues Involved:
1. Classification of services received by the appellant.
2. Applicability of service tax under the category of "programme producer's services."
3. Time-bar aspect and invocation of the extended period.
4. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.

Detailed Analysis:

1. Classification of Services Received by the Appellant:
The appellant, BCCI, entered into agreements with various non-resident service providers for the production of audio-visual coverage of cricket matches. The adjudicating authority confirmed a service tax demand on the appellant for these services, categorizing them under "programme producer's services." The appellant contended that the services provided were merely for recording cricket matches and did not constitute the production of a programme. The Tribunal, however, found that the contracts explicitly referred to the service providers as "producers" and detailed the production specifications, thus falling within the definition of "programme producer's services" as per Sections 65(86a) and 65(86b) of the Finance Act, 1994.

2. Applicability of Service Tax under "Programme Producer's Services":
The Tribunal examined the nature of activities undertaken by the service providers, which included setting up a broadcast control room, capturing images with multiple cameras, and processing and transmitting these images for broadcasting. The Tribunal concluded that these activities constituted the production of a programme as defined in the Finance Act, 1994. The services provided by Hawkeye Innovations Ltd., involving the supply of equipment and personnel for recording, were also deemed to fall within the definition of "programme producer's services." However, services related to hotel booking and transportation provided by IMG, South Africa, were considered supporting services and not subject to service tax under this category.

3. Time-Bar Aspect and Invocation of the Extended Period:
The appellant argued that the demand was time-barred as the show cause notices were issued beyond the normal period of limitation. The Tribunal noted that the appellant had not declared the details of services received from non-resident providers in their statutory returns. The investigation revealed the true nature of transactions only after the department commenced inquiries. The Tribunal held that the extended period was rightly invoked due to the suppression of material facts by the appellant. The show cause notices were issued within five years from the date of knowledge, making the demand legally sustainable.

4. Imposition of Penalties under Sections 76, 77, and 78 of the Finance Act, 1994:
The appellant contested the simultaneous imposition of penalties under Sections 76 and 78. The Tribunal referred to judicial precedents, including decisions by the Kerala and Delhi High Courts, which upheld the imposition of penalties under both sections for distinct and separate offences. The Tribunal noted that the law was amended prospectively from 10.5.2008 to bar simultaneous penalties. However, for the period prior to the amendment, the imposition of penalties under both sections was deemed valid. The Tribunal found no infirmity in the adjudicating authority's decision to impose penalties under Sections 76, 77, and 78.

Conclusion:
1. The services received by BCCI from non-resident providers were classified under "programme producer's services," making the appellant liable for service tax along with interest.
2. The services related to hotel booking and transportation from IMG, South Africa, were excluded from this category.
3. The extended period for confirming the service tax demand was justified due to the suppression of facts by the appellant.
4. The imposition of penalties under Sections 76, 77, and 78 was upheld for the period prior to the amendment on 10.5.2008.

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