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TMI Blog2025 (3) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue involved in all the appeals is identical and the impugned orders are identically worded I have taken up all the appeals for consideration simultaneously. S No APPEAL No. APPELLANT Order in Appeal No & date 1 2 3 4 1 ST/70605/2021 M/s GANESH COMMUNICATION 145/ST/Alld/2021 dated 31/05/2021 2 ST/70073/2022 M/S SANA CABLE NETWORK 158/ST/Alld/2021 dated 21/06/2021 3 ST/70082/2022 M/S KESHAV CABLE NETWORK 242/ST/Alld/2021 dated 13/08/2021 4 ST/70083/2022 M/S NEW FRIENDS CABLE NETWORK 222/ST/Alld/2021 dated 12/08/2021 5 ST/70101/2022 M/S GUNJA CABLE Order-in-Appeal No.241/ST/Alld/2021 dated 13/08/2021 6 ST/70130/2022 M/S RR MULTICHANNEL 341/ST/Alld/2021 dated 17/11/2021 7 ST/70347/2022 M/s WORLD VISION 29/ST/Alld/2022 dated 17/02/2022 8 ST/70348/2022 M/s MAHAK COMMUNICATION 59/ST/Alld/2022 dated 25/03/2022 9 ST/70555/2024 M/s ISMEET MULTI CHANNEL 238/ST/Alld/2021 dated 13/08/2021 10 ST/70635/2024 M/s HARI CABLE NETWORK 61/ST/Alld/2022 dated 25/03/2022 11 ST/706372024 M/s MAA VAISHNO CABLE NETWORK 144/ST/Alld/2021 dated 04/06/2021 I have taken appeal mentioned at Sl No 3 as reference appeal for recording the facts and findings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax, thereby contravening the provisions of Section 68 of the Finance Act, 1994 read with Rule 6 of Service Tax (Determination of Value) Rules, 2006. (iv) Penalty should not be imposed upon them under Section 77(1)(a),77(1)(b), & 77(1)(c) of the Finance Act, 1994, for failure to take registration under the category of "Cable Operator Service" within time and manner as prescribed under Section 69 of the Finance Act, 1994 read with Rule 4 of the Service Tax Rules, 1994, failed to maintained books of Accounts and other documents, failed to furnish information and produced documents called by the Department (as amended), (v) Penalty should not be imposed upon them under Section 77(2) of the Chapter V of the Finance Act, 1994 for contravention of Section 70 of the Act Ibid read with Rule 7 of the Rules ibid." 2.4 The said show cause notice was adjudicated as per the Order-in-Original No.14/ST/ACK-II/2020 dated 31.07.2020 by holding as follows:- "ORDER (i) Against the demand of service tax of Rs. 9,86,510/- proposed in the Show Cause Notice, I confirm the demand of Service Tax of Rs.6,48,454/- (including Cess). under proviso to Section 7311) of Finance Act 1994, read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Alloys Ltd. [2000 (120) ELT 214 (T-LB)]; BHEL [2007 (219) ELT 609 (T-Bang)] Rathi Ispat Ltd. [2010 (251) ELT 199 (All)] NVK Mohamed Sultan Rawther & Sons [2009) ELT 741 (T- Chen)] Ashok Leyland Ltd. [2005 (187) ELT 355 (T-Chen)] 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For upholding Order-in-Original, impugned order records as follows:- "4.2 I take up the issues one by one for decision. Firstly, the core issue of taxability on account of "Cable Operators" under tile category of "Cable Services" needs to be discussed. I observe that the Cable Operators Service provided by Cable Operators was first time brought under the ambit of Service Tax vide Notification No. 08/2002-ST dated 01.08.2002 and as per Section 65(21) of the Finance Act, 1994, "Cable operator has the meaning assigned to it in clause (aa) of Section 2 of the Cable Television Networks (Regulation) Act, 1995 (7 of 1995) and as per Section 65(22) of the Act, "Cable Service shall have the meaning assigned to it in clause (b) of Section 2 of the Cable Television Networks (Regulation) Act, 1995 (7 of 1995). Further, as per Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SOs to the cable operators have been made taxable 4.3.1 Furthermore, CBEC vide circular No F.No.B11 6 12005-TRU dated 27.07.2005, explained the changes in the budget for 2005-06 as under: "In the case of radio or TV broadcasting services, the services are subject to tax where the services are effectively used and enjoyed. Multi System Operators (MSOs) are permitted to receive signals from the broadcasting agencies on payment of prescribed amount. Cable operators transmit programmes to customers through cable network after receiving signals from the multisystem operators (MSOs). Prior to 16.06.2005, service tax was leviable on services provided by cable operators to their customers and multisystem operators to cable operators. In this year's budget, the charges recovered by the broadcasting agencies from the multisystem operator for providing the signals have been specifically made liable to service tax. This completes the service tax chain from the customer to the broadcaster." 4.3.2 1 observe that the MSO's received the TV signals from the broadcasters/aggregators. They entered into agreements with the broadcasters who provide the integrated receiver decoder boxes (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. 4.4 From the above discussion, it is clear that as the MSO had provided the service through the LCOs, the individual LCOs having their own subscription network were regarded as the cable operators and were liable to pay the service tax. Thus, the contention of the appellant that since MSO has already paid service tax, therefore, they are not liable to pay service tax is devoid of merit. 4.5 The appellant has also contested that in the present case the MSO were paying service tax on the same transmission received by them from the Television Channels and the cable operators again being asked to pay the service tax on the same transmission received from Television Channels leads to the double taxation on the same service. The appellant has relied upon the judgment of Hon'ble High Court of Punjab & Hariyana given in the case of M/s Aameet Puri Vs Union of India (2007 (5) STR 188 (P & H)]. I observe that in the said case the Hon'ble High Court has held that the in view of clear definition of "service" as "service to any person" by a cable operator including "a Multi System Operator", contention raised on behalf of the petitioners that Multi System Operator was not liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f signals received from the MSO ie M/s DEN. The subscriber has not asked for any brand for providing the said services. In fact, the appellant is also not providing any branded service as M/s DEN is supplying signal to the appellant which has been transmitted to the subscribers, in that circumstances, there is no relation of brand name to the ultimate customers. Therefore, I hold that the appellant is not providing any branded service to the subscribers; therefore, the appellant is entitled to avail the benefit of exemption Notification No. 33/2012-ST dated 20.06.2012. 3.7 As regard the issue of admissibility of Cenvat credit of the service tax paid by the MSO Le M/s DEN, I find that the matter has been decided by the CESTAT, Chandigarh in s Final Order No A/60167-60171/2019 dated 22.2.2019 in the case of M/s Blue Star Communication & others Vs CCE, Ludhiana by observing that "We find that the out of total amount received by the appellants, some amounts of total subscriptions, the appellant are remitting to the MSO on which the MSO is paying service tax, therefore, the signals provided by the MSO to the appellants is an input services for the appellants. Therefore, the service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming the demand of Service Tax and imposing penalty under Section 78 of the Act. Further, I also observe that the appellant has failed to take service tax registration in due time, failed to maintained proper records & also failed to furnish the information/documents to the department, therefore, penalties imposed by the adjudicating authority under Sections 77(3) 77(1)(b) & 77(1)(c) of the Act are justified. The appellant has never filed ST-3 returns, therefore, penalty imposed by the adjudicating authority for non-filing of ST-3 returns for the period April 2013 to June 2017 under section 77(2) of the Act is also justified." 4.3 I find that the show cause notice was issued to the appellant after the decision dated 22.02.2019 of Chandigarh Bench of the Tribunal in the case of M/s Blue Star Communication and others. In the said case Tribunal has held as follows:- "11. On careful consideration and submission made by both sides, the following issues emerges as under:- a) Whether the appellants are providing branded service or not? Consequently they are entitled for exemption under Notification No.6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of trade between the product and some person using such name or mark...". In the present case, the markings on the jute bags are not for the purpose of indicating a connection in the course of trade between the jute bag and some person using such name or mark. The markings are by compulsion of law only in order that Governmental Authorities involved in the PDS may identify and segregate the aforesaid jute bags. This being the case, it is obvious that there is no "brand name" involved in the facts of the present cases. 22. The facts of these cases are far from the facts in Kohinoor Elastics (supra). In Kohinoor Elastics (supra), it was found that, as a matter of fact, the customer wanted the brand name affixed on the product because he wanted the consumer to know that there is a connection between the product and him. This is very far from the facts of the present case, in that, as has been held by us above, it is clear that the markings required on the jute bags are compulsory, being required by the Jute Commissioner, and are not for the purpose of enhancing the value of the jute bags by indicating a connection in the course of trade between the aforesaid products and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as held by the Tribunal in the case of Trans Yamuna Communication Pvt. Ltd. Vs. Commissioner of Service Tax, Delhi - 2017 (52) STR 31 (Tri.-Del.) wherein this Tribunal observed as under:- "4. I have heard both the sides and perused the appeal records. As noted above, the tax liability is not in dispute. It appear that the scope of activities undertaken by the appellant is not falling under generally understood activities of cable operator who is involved in distribution of television signals to various clients. Admittedly, the television signals received from satellite is managed and handled through various layers of persons/activities till it reaches the ultimate customer. The appellant's role is as an intermediatory and apparently there could be a bona fide belief on their part regarding the tax liability under the said category. As already noted that they are not acting as a local cable TV operator in transmitting signals to the clients. Neither they are involved in receiving satellite signals as a MSO. The Finance Act, 1994 borrows the definitions of Cable operator" and "Cable service" from Cable Television Network (Regulation) Act, 1995. Considering scope of definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasised that Rule 5 of the Rules went much beyond the mandate of Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider "for such service" and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service." Admittedly, in this case, the appellants have received subscriptions from the subscribers for providing the services, on the said amounts, the appellants are liable to pay service tax. e) Whether the appellants are entitled for cenvat credit of service tax paid by the MSO or not? We find that the out of the total amount received by the appellants, some amounts of total subscriptions, the appellants are remitting to the MSO on which the MSO is paying service tax, therefore, the signal provided by the MSO to the appellant is an input services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia (Supra), Sub-Section XXVIII is introduced in Section 37 to provide for Rules which empower the Government to make rules for not allowing credit to be utilised for payment of duty on excisable goods, by Section 131 of Finance Act, 1999. Therefore, after this amendment reliance by the appellants on the decision in the case of Eicher Motors Ltd. v. Union of India will not help them. If a manufacturer wants to avail the benefit of Modvat credit in respect of inputs used in or in relation to the manufacture of final product on payment of duty on such final products under Rule 57A of the Central Excise Rules, he should follow the procedure laid down under the Modvat Scheme. The contention of the appellants is that if on the inputs the manufacturer had already paid the duty on the basis that when the goods are utilised in the manufacture of final product then tax on these goods are to be adjusted and this right accrued to the manufacturer on the date when they paid the tax on the inputs. The right will continue till the facility is available. A manufacturer who is working under the Modvat Scheme can certainly utilise the credit of the duty paid on the inputs used in or in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se cases where a manufacturer is seeking to take the credit after the introduction of the rule and to cases where the manufacturer is seeking to do so after a period of six months from the date when the manufacturer received the inputs. It was held that the said sub-rule operates prospectively in regard to those manufacturers who seek to take credit after coming into force of the rule. Agreeing with the Tribunal, the Apex Court has observed as follows :- "Therefore, in our opinion, the Tribunal was justified in holding that the rule in question only restricts a right of manufacturer to take the credit beyond the stipulated period of six months under the rule." 9. The ratio of the above judgment is that the said sub-rule is in the nature of period of limitation restricting the right of manufacturer to take the credit within the specified period of limitation and beyond the period of limitation, the benefit of said rule cannot be availed of by the manufacturer. 10. Having said as above, we may consider certain salutary principles regarding the principle of limitation, to test the argument of the applicants. 11. The law of limitation is based on delay and laches. It does not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re than the elasticity supplied in the Section itself. So, the eventuality envisaged in S. 11A for the further lengthening of the limitation period must be strictly construed." 17. In Gurusahai Saigal v. Commissioner of Income Tax, Punjab, AIR 1963 SC 1062, a case under the Income-tax Act, the Apex Court while construing the relevant provision of the Act has held that the proper way to deal with such a provision is to give it an interpretation which, to use the words of the Privy Council in Mahaliram Ramjidas's case, AIR 1940 PC 124, "makes the machinery workable, ut res valeat potius quam pereat." 18. Reference was made by the learned counsel for the applicant to the case of Commissioner of C.EX., Jaipur v. Parasrampuria Synthetics Ltd., 2000 (116) E.L.T. 581 (Tribunal) wherein it has been held that the bar created by the amended rule would have no application when the initial credit was taken within the prescribed period and the additional or the differential credit being taken after the prescribed period of six months. The said judgment of the Tribunal is of no avail to the applicant for the reasons more than one. Firstly, no principle of law has been discussed therein a ..... 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