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2021 (7) TMI 887 - AT - Service TaxSSI Exemption - branded service or not - service falling under threshold limit or not - Cable operator service - benefit of N/N. 6/2005-ST dated 1.03.2005 - exemption denied on the ground that appellant provided Branded service - HELD THAT - Similar issue 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 appellants are entitled for exemption under Notification No.6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012, extended period of limitation is not invokable, and appellants are 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. Relying on the decision of this Tribunal in the case of Blue Star Communication, following order is passed - a) the appellants are entitled for exemption under Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. b) the extended period of limitation is not invokable. Consequently, no penalty is imposable on the appellants c) the appellants are 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. d) 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 service to the subscribers within the 30 days of receipt of this order on which the appellant shall paid the service tax, if payable along with interest. The matter is remanded back to the Adjudicating authority for quantification of demand - the appeal is allowed by way of remand.
Issues Involved:
1. Whether the appellants are providing branded service or not. 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 were providing branded services and thus entitled to exemptions under Notification No. 6/2005-ST and Notification No. 33/2012-ST. The Tribunal found that the appellants, as cable operators, were not providing any branded services to subscribers. The signals received from the MSO were transmitted without any brand association with the ultimate customers. Citing the Hon'ble Apex Court's decisions in RDB Industries and Maheshwari Industries, the Tribunal concluded that the appellants were not providing branded services and were therefore entitled to the exemptions under the relevant notifications. 2. Extended Period of Limitation: The Tribunal considered whether the extended period of limitation was applicable. It was found that the appellants had a bona fide belief that they were not liable to pay service tax due to the exemptions under Notification No. 6/2005-ST and Notification No. 33/2012-ST. Additionally, there was industry-wide confusion regarding whether the appellants or the MSO were liable for the service tax. The Tribunal referenced the case of Trans Yamuna Communication Pvt. Ltd., concluding that the extended period of limitation was not applicable and no penalties were imposable on the appellants. 3. Best Judgment Assessment: The Tribunal assessed whether the best judgment under Section 72 of the Finance Act, 1994 was correctly applied. It was noted that the appellants were not given adequate time to supply data, and the assessment was based on data provided by the MSO, which was deemed incorrect. The Tribunal held that the assessment under Section 72 was incorrect and directed the appellants to provide their data within 30 days. The adjudicating authority was instructed to determine the correct service tax liability based on this data. 4. Service Tax on Gross Value: The Tribunal addressed whether the appellants were liable to pay service tax on the gross value of the services provided. According to Section 67 of the Finance Act, 1994, service tax is to be paid on the gross amount charged for the taxable services. The Tribunal cited the Hon'ble Apex Court's decision in Intercontinental Consultants and Technocrats Pvt. Ltd., affirming that the appellants were liable to pay service tax on the gross subscription amounts received from subscribers. 5. CENVAT Credit Entitlement: The Tribunal evaluated whether the appellants were entitled to CENVAT credit for the service tax paid by the MSO. It was established that the signals provided by the MSO were input services for the appellants. Consequently, the service tax paid by the MSO was available as CENVAT credit to the appellants. Final Order: 1. The appellants are entitled to exemptions under Notification No. 6/2005-ST and Notification No. 33/2012-ST. 2. The extended period of limitation is not invokable, and no penalties are imposable. 3. The appellants are liable to pay service tax on the gross value of services received and are entitled to avail CENVAT credit for the service tax paid to the MSO. 4. The adjudicating authority is directed to quantify the demand within the period of limitation based on the data provided by the appellants within 30 days of the receipt of this order. Conclusion: The appeal is allowed by way of remand for quantification of demand, with the adjudicating authority to reassess based on the provided data.
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