2018 (7) TMI 537 - AT - Service Tax

Extended period of limitation - Reverse charge mechanism - Broadcasting services - case of Revenue is that the said services were received by the appellant and service provider did not have any office in India and therefore, under Reverse Charge Mechanism appellants were required to pay service tax in respect of services so received - Held that - There was no intention of the appellant, not to pay said service tax and therefore, demand under the extended period is not sustainable - the demand under the category of Business Support Service not covered by normal period is not sustainable. Information Technology Software Service - Reverse charge mechanism - Held that - The agreement for Information Technology Software Service in the nature of right to use software was entered into on 29.12.2006. The said nature of activity continued beyond 16th May, 2008 till March, 2011 and revenue have raised demand only for the period for which the tax entry was introduced w.e.f. 25.06.2008 - demand upheld. Management, Maintenance or Repair Service - Held that - The appellant have accepted its levy after 01.03.2008 i.e. the period after the issue of Import of Services Rules and we, therefore, do not find any force of law for confirmation of demand under the said category for the period prior to 01.03.2008. Penalty - Held that - Since there was no intention to evade duty for the reason that under Reverse Charge Mechanism the appellants are entitled for credit of service tax paid under Cenvat Credit Rules, 2004 - penalty not warranted. Appeal allowed in part.

Summary

Issues:
1. Whether the demand under the extended period for services received from service providers located outside India is sustainable under the Reverse Charge Mechanism?
2. Whether the demand for services related to permitting use of copyright in cinematographic films and sound recording is justified?
3. Whether the demand for Information Technology Software Service is valid considering the date of agreement and taxable entry?
4. Whether the demand for Management, Maintenance, or Repair Service is applicable before the amendment in Import of Service Rules?
5. Whether the demand for promoting a brand of goods, services, business entity, etc. through a TV program is sustainable?

Analysis:

1. The appellant contested the demand under the Reverse Charge Mechanism for services received from various international service providers. The Tribunal found that the appellant was entitled to credit of the service tax paid, indicating no intention to evade payment. Therefore, the demand under the extended period was deemed unsustainable, and the demand for Business Support Service was set aside.

2. The demand related to permitting use of copyright in cinematographic films and sound recording was upheld by the Tribunal, rejecting the appellant's argument that the content was not recorded on any medium but sent through the internet. The Tribunal did not find the appellant's submission sustainable based on a CBEC letter.

3. Regarding Information Technology Software Service, the Tribunal noted that the agreement was entered into before the taxable entry date, but the nature of activity continued beyond the taxable period. The demand for this service was upheld, as it was raised only for the period after the tax entry was introduced.

4. The demand for Management, Maintenance, or Repair Service was set aside for the period before the amendment in Import of Service Rules, as the appellant accepted its levy only after the rule change.

5. The demand for promoting a brand through a TV program was set aside by the Tribunal, agreeing with the appellant's contention that appearing in a talk show did not constitute promotion. The penalty imposed under Section 78 of the Finance Act was also set aside due to the lack of intention to evade duty under the Reverse Charge Mechanism.

In conclusion, the Tribunal partially allowed the appeal, setting aside some demands while upholding others based on the specific circumstances and legal provisions applicable to each service category.