2013 (9) TMI 670 - AT - Service Tax

Liability to pay duty - Section 66A - BCCI entered into a contract with the non-residents service providers to produce audio- visual coverage of cricket match, on behalf of BCCI and the producers undertake to produce the audio-visual coverage of cricket match for broadcasting on the terms and conditions of the agreement - Held that - service provider has installed 30-32 cameras in the stadium to capture the images of the cricket match. The applicants have to set up a broadcast control room (BCR) in the stadium. The images taken by the cameras are transmitted to vision colour correction unit and the same are viewed by the experts and after processing, these images are transmitted to the director s vision desk. Waiver of pre deposit - Held that - activities undertaken by the service provider and the terms and conditions of the agreement, prima facie we find no merit in the contention of the applicants that the applicants are not covered under the scope of programme producer service as provided under the Finance Act. In view of this, we find that the applicants have not made out a case for total waiver of the amount of service tax. The applicants are directed to deposit 50% of the service tax confirmed in each case within eight weeks. - stay granted partly.

Summary

Issues Involved:
Application for waiver of pre-deposit of service tax, interest, and penalties on the ground of receiving taxable service of programme producer service from foreign service providers.

Analysis:
The applicants, a cricket board, entered contracts with non-resident service providers for audio-visual coverage of cricket matches. The service providers were responsible for producing the coverage for broadcasting. The adjudicating authority confirmed the demands and penalties, holding the applicants liable for service tax as recipients of taxable service under Section 66A of the Finance Act.

The applicants argued they were not programme producers as they had no control over the cricket matches, merely capturing audio-visuals for television transmission. They contended that they were not producing the programme on behalf of themselves, as required by the definition of 'programme producer'. They also claimed that the service providers were undertaking both audio and visual activities, not just recording, hence not liable for service tax.

The Revenue relied on the contract terms, where service providers were described as producers responsible for audio-visual coverage of cricket matches. The contract specified requirements for commentators, pitch reports, and live feeds, indicating the service providers' role in producing the programme. The Revenue argued that the service providers provided taxable service of programme producer, making the applicants liable for service tax.

Upon reviewing the contract and activities described, the Tribunal found that the service providers set up equipment, employed commentators, and managed various aspects of the broadcast. The Tribunal noted the detailed process of capturing, processing, and transmitting images and sounds during the matches. Considering these activities and the contract terms, the Tribunal concluded that the applicants were covered under the scope of programme producer service, as defined in the Finance Act.

As a result, the Tribunal directed the applicants to deposit 50% of the confirmed service tax amount within eight weeks, with the remaining dues' pre-deposit waived during the appeal's pendency. The applicants were required to comply by a specified date, with the Revenue's early hearing applications to be considered accordingly.

In summary, the Tribunal upheld the liability of the applicants for service tax as recipients of programme producer service, based on the contract terms and activities performed by the service providers in producing the audio-visual coverage of cricket matches.