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M/s Universal Power Systems Pvt Ltd Versus Commissioner of Service Tax, Chennai

2015 (12) TMI 1320 - CESTAT CHENNAI

Business auxiliary service - Valuation - Inclusion of Royalty - Appellant provided service to telecommunication operators to make use of the contents provided to it though the copyright agreement entered into with the music companies - Held that:- There is a demarcated line in the licensing agreement itself demonstrating that the telecommunication companies were stranger to the copyright owners which were the music companies. There was a privy between the appellant and the music companies to dis .....

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pect of the value of service provided to the telecommunication operators. That does not give any scope to bifurcate tax element.

Prima facie, examination of the license agreement extracted by the learned adjudicating authority in the impugned order shows that the copyright holder was also aware that the appellant is going to exploit the copyright for mutual benefit of each other. Therefore, at this stage it looks like a case of advancement of business of music companies by the appella .....

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picture etc. Royalty for the copyright was to be payable to the music companies while appropriate value for the service provided to telecommunication companies were billed. 2. Appellant further submits that Revenue first intended to tax the appellant under the category of business auxiliary service and thereafter came forward to tax under support of business and commerce service and thereafter came to tax the same under the category development of content service. The last classification was don .....

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t from 1.4.2010 when taxing entry therefor came up. Surprisingly, Revenue is taxing royalty from 1.5.2006 which is not permissible under law. 4. It is also submission of the appellant that when the appellant was complying to the law paying tax under business auxiliary serviceand the show cause notice has also recognized that, there cannot be a different view subsequently intending to classify under the three proposed category. The entire adjudication is also time-barred. 5. With the aforesaid pr .....

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rd both sides and perused the records. 8. There is a demarcated line in the licensing agreement itself demonstrating that the telecommunication companies were stranger to the copyright owners which were the music companies. There was a privy between the appellant and the music companies to distribute the copyright what was conferred by the music company on the appellant. Therefore, Revenue has nothing to do to make an exercise to bring music companies into the picture to determine incidence of t .....

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