2010 (3) TMI 224 - AT - Service Tax

Cable operating service enhancement of assessment by the commissioner adjudicating officer assessed at Rs. 20/- but commissioner has enhanced the assessment in revision to Rs. 200 for each (KTV) cable connection Held that Commissioner has erred in holding that each individual cable operator had paid Rs.200/- per connection. The adjudicating authority has rightly accepted the contention of the assessees that they had paid at the rate of Rs.20/- per KTV connection. Therefore the enhancement done by the Commissioner in revision to the rate of Rs.200/- per connection is not sustainable

Summary

Issues: Determination of service tax liability for individual cable operators based on the amount collected per connection.

Analysis:
The judgment by the Appellate Tribunal CESTAT, CHENNAI involved multiple individual cable operators appealing against the Commissioner of Central Excise, Madurai regarding the determination of service tax liability. The common issue in all appeals was the amount of service tax required to be paid by the individual cable operators. The Tribunal heard all appeals together and disposed of them through a common order.

The Commissioner had enhanced the service tax liability on each assessee based on the amount collected per connection. The Commissioner relied on a register seized from Madurai Cable TV Communication (MCTC) to determine that each individual cable operator had 350 cable connections and collected Rs.200 per month per connection from subscribers, thus evading service tax liability. However, the Tribunal found discrepancies in the Commissioner's calculations. The register author, Ramesh, stated that the payment for each KTV connection was Rs.20, but the Commissioner concluded that each operator collected Rs.200 per connection based on different connections like Sumangali Cable Vision. The Tribunal noted that the Commissioner erred in assuming the uniform collection of Rs.200 per connection as each operator had different numbers of KTV connections and paid Rs.20 per connection.

Specifically, the Tribunal highlighted the number of connections and the amount paid per connection for each appellant. For instance, Shri Vetriselvan had 350 KTV connections, Jizan Cables had 225 KTV connections, M.A.Rasheed had 335 KTV connections, Shri Baskaran had 75 KTV connections, and Shri Suyumburaja had 375 KTV connections. The Tribunal concluded that the Commissioner's enhancement of the service tax liability to Rs.200 per connection was not sustainable as the appellants had paid at the rate of Rs.20 per KTV connection. Consequently, the Tribunal set aside the impugned orders and allowed the appeals in favor of the individual cable operators.

In summary, the Tribunal's judgment focused on the incorrect determination of service tax liability by the Commissioner based on the amount collected per connection from subscribers by individual cable operators. The Tribunal found discrepancies in the Commissioner's calculations and ruled in favor of the appellants, setting aside the enhanced service tax liabilities.