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2009 (5) TMI 111 - AT - Service TaxDemand on licence fee paid by appellant as recipient of distribution service provided by foreign based concern - appellant as a receiver of such service was the person liable to pay service tax on such import of service - The appellants became liable to service tax under the inclusive clause of broadcasting service defined under Section 65(105)(zk) g - appellants would be entitled to Cenvat credit of the service tax demanded on the licence fee paid - we find that the appellants have made out a prima facie case against the impugned demand and penalties stay granted
The Appellate Tribunal CESTAT, CHENNAI, in the citation 2009 (5) TMI 111 - CESTAT, CHENNAI, heard an application from M/s. Vijay Television Pvt. Ltd. for waiver of pre-deposit of service tax, interest, and penalty. The dispute arose from the liability of VTPL to service tax on the license fee paid to STARL, Hongkong, for the distribution of the channel "Vijay." The tribunal found that STARL was acting on behalf of SARZ, the owner of the channel, and provided broadcasting services to VTPL in India. The tribunal upheld the liability of VTPL to pay service tax on the license fee to STARL.
In the appeal, VTPL argued that the services provided by STARL were taxable under broadcasting services, and the appellant was liable to pay service tax as the receiver of such services. The tribunal examined the definition of broadcasting services under Section 65(105)(zk) and found that the services of permitting the rights to receive any form of communication in India were liable to service tax. The tribunal concluded that VTPL, as the person appointed in India to distribute the channel rights, was liable to pay service tax on the activities undertaken in India. The tribunal further noted that VTPL would be entitled to Cenvat credit of the service tax demanded on the license fee paid to STARL. Therefore, the tribunal ordered a waiver of pre-deposit of the adjudged dues and stayed the recovery pending the decision in the appeal. The tribunal found that the appellants had made out a prima facie case against the impugned demand and penalties, leading to the decision in their favor. The order was pronounced and dictated in the open court by the tribunal members, Ms. Jyoti Balasundaram and Shri P. Karthikeyan.
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