TMI Blog2017 (1) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny of the contract terms relating to those programmes for which fillers are sold to music companies, and was the subject matter in the proceedings before the adjudicating authority, will attest to the veracity of the claim. If such ascertainment of the nature of commercial engagement between the appellant and the overseas broadcasting agency reveals that of a client, and not that of an agent, and the ascertainment of the nature of the relationship between the appellant and the music companies who supply advertisement fillers in the programme produced by the appellant reveals that of a client, and not that of a fee remission agency, the claim of the appellant to be an independent service provider delinked from the foreign broadcasting serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... music companies for the period from 1 st July 2001 to 31 st September 2005. Service tax authorities claim that these receipts had been suppressed by the appellant despite being chargeable to tax under section 65(105)(zk) of Finance Act, 1994. The appellant had been discharging tax on the consideration for the said activity only with effect from 1 st May 2006 when section 65(105)(zzzm) was incorporated in Finance Act, 1994 to levy tax on sale of space or time for advertising service though section 65(105)(zk) of Finance Act, 1994, was incorporated from 16 th July 2001. 3. The regulatory scheme for electronic media mandates the appointment of branch, subsidiary, representative or agent in India if the headquarters of the broadcasting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 28 th February 2006 issued when the latter levy was incorporated which intended the levy to bring such providers who, not being providers of broadcasting agency service , sell space or time for advertisement within the tax net. Holding that this exclusion implied the taxability of the service in the hands of appellant from 1 st July 2001, the adjudicating authority cited the decision of the Tribunal in Vijay Television (P) Ltd v. Commissioner of Service Tax, Chennai [2009 (13) STR 296 (Tri. Chennai)], Siticable Network P Ltd v. Commissioner of Central Excise, Mumbai [2006 (4) STR 535 (Tri.-Mumbai)] and Zee Telefilms Ltd v. Commissioner of Central Excise, Mumbai [2006 (3) STR 252 (Tri-Delhi)] to reinforce the conclusion. 4. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority to arrive at that conclusion that the income so collected is taxable as broadcasting agency service , viz., the decisions in re Zee Telefilms Ltd and Vijay Television (P) Ltd. 6. We must premise generally that rendering of a service is not openly manifest and the conclusion of the activity is evidenced in the satisfaction obtained by the recipient of service. Consequently, the disbursement of consideration is not the sole indication of that satisfaction but the purpose for which the consideration has been paid. We note that section 65(105)(zk) of Finance Act, 1994 describes the activity of taxable service fastened on the appellant as that rendered (zk) to a client, by a broadcasting agency or organization in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es existence of contracts for purchase of slots from the overseas broadcasting agency and, in turn, production of programmes that do contain advertisement spots purchased by various music companies. It is their contention that, in this business model, any activity of theirs that goes beyond selling of time-slots to producers for broadcasting of programmes, obtaining sponsorship for programmes and collecting of broadcasting charges on behalf of the broadcasting agency are on their own account and not taxable under section 65(105)(zk) of Finance Act, 1994. In undertaking such activity which is not attributable to their role as representative of the broadcasting agency, the definition of broadcasting service would not apply. Appellant relies u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asting agency and for which slots are booked with the overseas broadcasting agency. At the same time, the appellant engages commercially with the clients of the overseas broadcasting agency on which tax dues therein, as provider of broadcasting agency service are discharged. Only a scrutiny of the contract terms relating to those programmes for which fillers are sold to music companies, and was the subject matter in the proceedings before the adjudicating authority, will attest to the veracity of the claim. If such ascertainment of the nature of commercial engagement between the appellant and the overseas broadcasting agency reveals that of a client, and not that of an agent, and the ascertainment of the nature of the relationship between t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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