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TMI Blog2015 (3) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... er, there is a dispute on interpretation of the relevant provisions of Section 65 of the Finance Act, 1994. Therefore, the Tribunal, placing reliance on the decision of the Tribunal in Zee Telefilms case [2004 (3) TMI 1 - CESTAT, NEW DELHI], referred supra, vacated the penalty. - there is no suppression of material facts with an intent to evade payment of service tax and education cess, we hold that the Tribunal was justified in vacating the penalty imposed by the adjudicating authority. - Decided against Revenue. - C.M.A.No.3292 of 2009 - - - Dated:- 19-3-2015 - IN THE HIGH COURT OF JUDICATURE AT MADRAS 19.3.2015 R.Sudhakar And R.Karuppiah JJ. C.M.A.No.3292 of 2009 The Commissioner of Service Tax Versus Vijay Television (P) Ltd. The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench For the Appellant : Mr.V.Sundareswaran Standing Counsel For the Respondents : Mr.Raghavan Ramabadran Judgment (Delivered by R.SUDHAKAR, J.) This appeal is filed by the department under Section 35G of the Central Excise Act, 1944 read with Section 93 of the Finance Act, 1994 against the Final Order No.1098 of 2008, dated 30.7.2008 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of consideration. The demand of service tax is on the amounts collected by the first respondent from the sponsors/ advertisers as consideration for the time slots allotted to them. 3.4. On this premise, the department issued a show cause notice on 5.10.2006. The show cause notice also proposed to demand service tax for the period beyond the normal period of limitation prescribed under Section 73 of the Finance Act, 1994. The relevant portion of the said show cause notice reads as under: 13. Whereas it also appears that- (i)(a) VTPL had been rendering taxable service under the category of Broadcasting Service and had been earning income towards the same w.e.f. 16.07.2001, without taking out Registration under Service Tax, payment of appropriate Service Tax and filing periodical ST-3 Returns. (b) The facts relating to the said business transactions and income earned there from which are liable to be taxed under the provisions of Chapter V of the Finance Act, 1994, and the Rules made there under, would not have come to light, but for the initiation of Departmental action. (ii)VTPL by not disclosing the facts relating to their business activities and by not foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n them for their failure to file the periodical ST-3 Returns under Broadcasting service category. (viii)Penalty under Section 78 of the said Act as amended should not be imposed on them in as much as they have suppressed the facts of having rendered the said taxable services to the Department and also contravened the provisions of Chapter V of Finance Act, 1994, and the Rules made there under with intent to evade payment of Service Tax. 3.5. The first respondent submitted reply to the show cause notice and thereafter, adjudication order was passed confirming the entire demand and the proviso to Section 73(1) of the Finance Act was also invoked. The operative portion of the adjudication order reads as under: 21. VTPL failed to register themselves with Service Tax department, and also failed to pay Service Tax and Education Cess due and file S.T.3 Returns for the value of taxable service realized by them. They have contravened the provisions of Section 68, 69 70 of the Finance Act, and suppression of facts and willful intent to evade payment of Service Tax and Education Cess by VTPL are well established. Therefore, the Service Tax and Education Cess are liable to be deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neteen lakhs eighty nine thousand seven hundred and forty-eight only) under Section 78 of the said Act on VTPL. (emphasis supplied) 3.6. The assessee appealed to the Tribunal and the Tribunal after going through the relevant provisions of the Finance Act, 1994, more particularly, the definition of the term broadcasting as defined under Sections 65(14) of the Finance Act, 1994 (as amended by the Finance Act, 2001) and Section 2 of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990; and the term broadcasting agency or organization as defined under Section 65(15) of the Finance Act, 1994, came to the conclusion that the services rendered by the first respondent/assessee fall under the service tax net and observed as under: 5. After giving careful consideration to the submissions, we find that the appellants have not made out any case on merits. The 'Broadcasting Company' was engaged in the business of operating 'VIJAY' television channel and was registered with the department for providing 'broadcasting service'. M/s.Vijay Television (appellants), under an agreement, purchased specific time slots from 'Broadcasting Company' agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducing, selecting and scheduling of programmes to be telecast by the Broadcasting Company and were collecting money from advertisers and sponsors for such programmes for what constituted 'broadcasting service' defined under Section 65(14) of the Finance Act, 1994. In the circumstances, it cannot be said that the appellants suppressed material facts before the department with intent to evade payment of service tax. This apart, we have not found any reasoning in the Commissioner's order for holding that M/s.Vijay Television suppressed facts with intent to evade payment of service tax. The order merely contains an averment reading 'suppression of facts and wilful intent to evade payment of service tax and education cess by VTPL are well established'. We have not found a speaking order on the limitation issue. In the circumstances, the demand of service tax and education cess for the extended period of limitation is liable to be set aside, and we do so. The Commissioner may requantify the amount for the normal period of limitation and recover the same from the party. (emphasis supplied) Consequently, the penalty imposed under Sections 76 to 78 of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax. This finding is bald and bereft of reasons. 7. Even otherwise, in the appeal filed by the first respondent/ assessee, on fact, the Tribunal has gone into the Slot Sale Agreement dated 1.8.2001 and based on the plea taken by the first respondent herein, the Tribunal came to the conclusion that there was material before the department to show that they were in the know of activities undertaken by the first respondent. Though the learned counsel for the first respondent wanted to file certain documents to show that there was series of correspondence exchanged between the department and the first respondent, we do not want to enter upon further controversy on fact. Nevertheless, we find that in the order of the Tribunal there is a finding on fact that there is no suppression of material facts by the first respondent before the department. There is also a finding that the provisions of the Slot Sale Agreement between the first respondent and the broadcasting company were within the knowledge of the department and, therefore, the department could have proceeded for levy of service tax on the premise that the nature of activity rendered by the first respondent/assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been treated to be final. It would be binding on the High Court while exercising its appellate jurisdiction. A 'substantial question of law' would mean - of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with -technical, of no substance or consequence, or academic merely. (See Boodireddy Chandraiah v. Arigela Laxmi, [ (2007) 8 SCC 155]). 18. The High Court has not said that the finding of fact arrived at by the High Court was perverse and/or was based on applying wrong legal principles etc. The High Court proceeded on the basis that the failure on the part of the appellant to submit required declaration or application for licence for establishment, would amount to concealment of facts from the department. We will assume to be so. But, as we have noticed earlier, requisite information was not only furnished on 22nd January, 1991, indisputably the officers of the Central Excise Department made inspection of the factory and the books maintained by the appellant, including the production register, which must have disclosed the nature of the products from the factory in question. If the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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