Set Top Box Supply to Customers Qualifies as Deemed Sale, Not Service - No Service Tax Under Finance Act

CESTAT ruled that Set Top Box (STB) supply by Multi-System Operators to customers constitutes deemed sale rather than service, making it ineligible for service tax levy under Finance Act, 1994. The appellant had correctly determined and discharged service tax liability, certified by Chartered Accountant, prior to filing appeal. Following precedent in Dish TV India Limited case, Tribunal held STB provision is a one-time equipment supply activity distinct from DTH services of television channel transmission. The original authority's demand was invalidated for failing to establish specific grounds, while merely relying on UCN Cable Network precedent without proper analysis. Impugned order set aside and appeal allowed, confirming STBs are subject to VAT under State legislature rather than service tax. .....

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