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2013 (10) TMI 1161 - CESTAT NEW DELHIDemand of service tax - Reverse charge mechanism - Broadcasting service - Sections 65(105)(zzzu) read with 65(86a) and 86(b) - Whether Appellants are liable to pay service tax as recipients of broadcasting Service under reverse charge mechanism - Held that:- Appellants do not have any technology for receiving signals or downlinking facilities. Signals are directly received by the MSOs/cable operators from the satellite through Set Top Boxes and smart cards supplied by the Appellant. Technically they are not recipients of any broadcasting service. However, ongoing through the definition of Broadcasting we note that in the definition after the ‘means part’ and first inclusive part the words ‘and in case of broadcasting agency or organisation having its head office situated any place outside India includes the activities of selling time slot or obtaining sponsorship for channels or collecting broadcasting charges’ also exist. Definition is to be read as a whole and so read cannot be interpreted to conclude that the Appellant is a service recipient as per the ‘means’ and first inclusive part of the definition and a service provider under the second inclusive part of the definition. From the second inclusive part of the definition that only permitting the right to receive signals in any form by transmission through electromagnetic waves through space or cable to MSO/cable operators is an aspect covered as taxable and Distribution rights given by ESSD to the Appellant and which are not covered under the definition are not taxable and therefore this finding of the Commissioner is not sustainable - ESSM is not a service provider and Appellants are not recipient as held by the Commissioner and the distribution rights given by ESSM to the appellants are not taxable. Appellant is covered under second inclusive part of the definition of Broadcasting. Similarly appellant is a broadcasting agency also by virtue of inclusive definition of Broadcasting agency. Taxable service under Section 65(105)(zk) means any service provided or to be provided by a Broadcasting Agency and providing broadcasting service by virtue of being based in India and having a head office outside India. The finding of the Commissioner that the appellant is service recipient on the basis of the second inclusive definition is not therefore sustainable. Moreover, the foreign broadcaster is engaged in uplinking the signal to a satellite outside India and downlinking of signal is done by MSOs/Cable operators in India and appellants technologically does not receive any broadcasting service. Appellant is covered under broadcasting agency and broadcasting and also under definition of taxable service in the capacity of branch office, subsidiary representative/agent in India and having head office outside India and is thus a service provider and not a service recipient, as held by the Commissioner. The demands on the both Appellants are not sustainable under the reverse charge mechanism and consequently interest and penalty are also not imposable. Service tax on Intellectual property - Business Auxiliary service - Held that:- Where service tax has not been levied or short levied, tax can be demanded within one year from the relevant date. However if tax has not been levied or short levied by reason of, fraud, collusion, wilful, misstatement, suppression of fact etc tax can be demanded within 5 years from the relevant date. The Commissioner has discussed the invocation of extended period in para 46 of Order-in-Original and has held that appellant has suppressed the facts from the department as they did not get themselves registered for these services, pay the service tax and file ST-3 returns. The appellant did not pay any service tax under Intellectual Property Service, Business Auxiliary Service in respect of Product Licensing Agent/promotion licensing Agent and on Programme Producer Service and did not file any Return for these services. We do not find any fault in finding of the Commissioner in invoking extended period of limitation and consequently Appellant is liable to interest and penalty - Decided in partly in favour of assessees.
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