2023 (8) TMI 351 - AT - Service Tax

Classification of services - Broadcasting Services or not - operating television channel and also uplinking facility for third party - It appeared to the department that the allotment of air time was relating to broadcasting service and that the appellant is primarily engaged in the business of television broadcasting - extended period of limitation - HELD THAT - After 16.06.2005, the taxable service under Section 65 (105) (zk) has become wide so as to include transmission of electro-magnetic waves through space or through cables, direct to home signals or by any other means to cable operator including multisystem operators (MSO) or any other person on behalf of the said agency or organisation. Thus the clarification issued by the Board vide its circular dt.09.07.2001 that MSO is not a broadcasting agency as they merely transmit signals looses its relevancy after the amendment brought forth in the definition. The argument of the appellant taking shelter of the circular dt. 09.07.2001 therefore fails. It is stated that the channels 'SS Music' as well as 'Sur Sangeeth' are owned and operated by the appellant. Again, the accounts maintained by appellant show collection of charges towards airtime allotment. This fact of collecting charges for airtime allotments would lead to a strong inference that the appellant has indeed been rendering 'Broadcasting Service' - The present status of the application shows abandoned . Merely because an application was given by M/s.Fortune Media (P) Ltd. it cannot be said that the said channel belonged to them and is discussed in this order. The permission letters submitted before the competent authority for issuing licence shows that these channels SS Music and Sur Sangeeth are owned by appellant. On merits, we do not find any grounds to accept the contention of appellant that they are not rendering any broadcasting services. Time Limitation - HELD THAT - The appellant has totally suppressed these facts and has tried to create confusion so as to escape the liability to pay tax. The agreement entered by M/s.Coxswain Technologies Ltd. with M/s.Fortune Media Pvt. Ltd. and M/s.Mindscape Creations Pvt. Ltd. has to be considered as a sham document to cover up the broadcasting service rendered by the appellant. Proceedings before quasi-judicial authority is not tied up in the heavy shackles of Procedures and Evidence Act. The same should not be taken advantage by parties to misrepresent facts and furnish fabricated and sham documents - the demand invoking extended period and imposition of penalties are legal and proper. Appeal dismissed.

Summary

Issues Involved:

1. Classification of services provided by the appellant.
2. Liability to pay service tax under 'Broadcasting Service.'
3. Invocation of extended period for demand.
4. Imposition of penalties under Section 77 and Section 78 of the Finance Act, 1944.

Summary:

1. Classification of services provided by the appellant:

The appellant argued that they were engaged solely in uplinking services and not in broadcasting services. They cited a Board's circular dated 09.07.2001, which stated that uplinking agencies are not liable for service tax under broadcasting services. However, the Tribunal found that the appellant was indeed providing broadcasting services, as evidenced by permission letters and agreements indicating ownership and operation of channels like 'SS Music' and 'Sur Sangeeth.' The Tribunal noted that after the amendment on 16.06.2005, the definition of 'Broadcasting Service' became broader, including transmission of electro-magnetic waves through various means. The appellant's reliance on the 2001 circular was deemed irrelevant post-amendment.

2. Liability to pay service tax under 'Broadcasting Service':

The Tribunal upheld the original authority's decision that the appellant was liable to pay service tax under 'Broadcasting Service' for the period from 2005-06 to 2009-10. The appellant's contention that they were only providing uplinking services was rejected based on documentary evidence showing collection of airtime allotment charges and expenses towards satellite rent, indicating broadcasting activities.

3. Invocation of extended period for demand:

The Tribunal found that the appellant had deliberately misled the department by disguising broadcasting services as uplinking services and misclassifying them under 'Business Support Services' (BSS) to evade tax. The invocation of the extended period for demand was justified as the appellant had suppressed facts and misrepresented their activities.

4. Imposition of penalties under Section 77 and Section 78 of the Finance Act, 1944:

The penalties imposed under Section 77 and Section 78 were upheld. The Tribunal agreed with the original authority's observation that the appellant had played a "clever hide and seek game" with the department, submitting misleading documents and misclassifying services intentionally to evade tax.

Conclusion:

The Tribunal dismissed the appeal, upholding the demand of Rs. 78,38,768/- along with interest and penalties. The appellant's arguments regarding the nature of their services and the applicability of the 2001 circular were rejected, and the Tribunal confirmed that the appellant was liable for service tax under 'Broadcasting Service' for the specified period.