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2020 (1) TMI 941 - AT - Service TaxSSI Exemption - branded service or not - N/N. 6/2005-ST dated 1.03.2005 - Cable operator service - appellants were not paying service tax on the ground that they are not liable to pay service tax and did not get some registered with the department - Extended period of limitation - service tax on the gross value of the services or otherwise - CENVAT credit of service tax paid by the MSO. HELD THAT - The issue is decided in the case of MS BLUE STAR COMMUNICATION, MS EK ONKAR DIGITAL SERVICES, MS SHARMA CABLE, MS EK ONKAR ENTERPRISES, MS SHIVA CABLE VERSUS C.C.E. S.T. -LUDHIANA 2019 (2) TMI 1385 - CESTAT CHANDIGARH where it was held that the appellant is not providing any branded service as MSO is supplying signal to the appellants which has been transmitted to the subscribers, in that circumstances, there is no relation of brand name to the ultimate customers. The appellants are not providing any branded service to the subscribers therefore, the appellants are entitled to avail the benefit of exemption N/N. 6/2005-ST dated 01.03.2005 and N/N. 33/2012-ST dated 20.06.2012. Thus, the appellant is entitled for exemption under Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012 - the extended period of limitation is not invokable. Consequently, no penalty is imposable on the appellant - the appellant is liable to pay service tax on the gross value of services received by them and is entitled to avail cenvat credit of service tax paid on the amount remitted to the MSO. The adjudicating authority shall quantify the demand for the period within the period of limitation on production of data of services provided by the appellant of cable services to the subscribers within the 30 days of receipt of this order on which the appellant shall paid the service tax, if payable. Appeal allowed by way of remand.
Issues Involved:
1. Whether the appellants are providing branded service or not, and consequently, whether they are entitled to exemption under Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. 2. Whether the extended period of limitation is invokable or not. 3. Whether the best judgment under Section 72 of the Finance Act, 1994 has been assessed correctly or not. 4. Whether the appellants are liable to pay service tax on the gross value of the services provided by them or not. 5. Whether the appellants are entitled to CENVAT credit of service tax paid by the MSO or not. Detailed Analysis: 1. Branded Service and Exemption Eligibility: The Tribunal examined whether the appellants, who are cable operators, were providing a branded service. It was determined that the subscribers did not request any specific brand for the cable services and the appellants were merely retransmitting signals received from the MSO. The Tribunal referenced the Supreme Court's decision in RDB Industries, which clarified that markings required by law do not constitute a brand name. Similarly, in Maheshwari Industries, the criteria for a brand name were outlined, emphasizing that the name or mark must indicate a connection in trade. Based on these precedents, the Tribunal concluded that the appellants were not providing branded services and were therefore entitled to the exemptions under Notification No. 6/2005-ST and Notification No. 33/2012-ST. 2. Extended Period of Limitation: The Tribunal found that the appellants had a bona fide belief that they were not liable to pay service tax due to the exemptions. There was industry-wide confusion regarding whether the appellants or the MSO were liable for the tax. Citing the case of Trans Yamuna Communication Pvt. Ltd., the Tribunal held that the extended period of limitation was not applicable, and thus, no penalties were imposable on the appellants. 3. Best Judgment Assessment: The assessment under Section 72 of the Finance Act, 1994, was found to be incorrect as it was based on data supplied by the MSO without giving the appellants adequate time to provide their own data. The Tribunal directed the appellants to submit their activity data within 30 days to the adjudicating authority, who would then reassess the correct service tax liability based on this data. 4. Service Tax on Gross Value: The Tribunal upheld that under Section 67 of the Finance Act, 1994, the appellants were liable to pay service tax on the gross value of the subscription received from subscribers. This interpretation was supported by the Supreme Court's ruling in Intercontinental Consultants and Technocrats Pvt. Ltd., which emphasized that the valuation of taxable services should be based on the gross amount charged for providing such services. 5. Entitlement to CENVAT Credit: The Tribunal recognized that the appellants were entitled to CENVAT credit for the service tax paid by the MSO on the amount remitted to them. The signals provided by the MSO were considered input services for the appellants, making the service tax paid by the MSO available as CENVAT credit. Final Order: a) The appellants are entitled to exemptions under Notification No. 6/2005-ST and Notification No. 33/2012-ST. b) The extended period of limitation is not invokable, and no penalties are imposable. c) The appellants are liable to pay service tax on the gross value of services received and are entitled to CENVAT credit for service tax paid to the MSO. d) The adjudicating authority must quantify the demand within the limitation period based on the data provided by the appellants within 30 days, and the appellants must pay any service tax determined to be payable. The appeal was disposed of in these terms.
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