2006 (10) TMI 11 - HC - Service Tax

Service Tax Cable operator Respondent petitions rejected on the ground that definition includes service to any person by cable operator including Multi Systems Operator(MSO) Service tax not levied twice in the case of Multi Systems Operator MSO liable to service tax

Summary

Issues:
Quashing demand of service tax on Multi System Operator (MSO) under the Finance Act, 1994.

Analysis:
The judgment addressed two writ petitions seeking the quashing of service tax demands on the grounds that service tax was not applicable to Multi System Operators (MSOs). The petitioners argued that MSOs were not providing services directly to consumers but to cable operators, thus not falling under the purview of service tax. The petitioners contended that service tax should only be levied when services are provided by a cable operator to a customer, not to another cable operator.

The Commissioner Central Excise Service Tax countered by highlighting the redefinition of "taxable service" under the Finance Act, 2004, to include services provided to "any person" by a cable operator, which now encompassed Multi System Operators. The definition of "cable service" was also cited, incorporating services provided by MSOs. Additionally, it was emphasized that the Cenvat Credit Rules allowed for the crediting of service tax paid on input services by MSOs against the tax on output services provided by cable operators to viewers.

Upon reviewing the arguments, the court found that the clear definition of "service" now included services provided to any person by a cable operator, including Multi System Operators. The court dismissed the petitioners' contentions, ruling that MSOs were indeed liable to pay service tax as per the amended definition. The court also rejected the claim of double taxation, citing the availability of Cenvat Credit Rules to prevent such duplication. Consequently, both writ petitions were dismissed by the court.