TMI Blog2019 (2) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... lying signal to the appellants which has been transmitted to the subscribers, in that circumstances, there is no relation of brand name to the ultimate customers - the appellants are not providing any branded service to the subscribers therefore, the appellants are entitled to avail the benefit of exemption Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. Whether the extended period of limitation is invokable or not? - Held that:- The appellants were under bonafide belief that they are not liable to pay service tax as they are entitled for benefit of exemption under notification no. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012, therefore, they did not pay service tax. Moreover, there was confusion in the industry during the relevant period whether the appellants are liable to pay service tax or the MSO liable to pay service tax on their activity, in that circumstances, the benefit of doubt goes in favour of the appellants - the extended period is not invokable - penalty also not imposable. Whether the best judgement under Section 72 of the Finance Act, 1994 has been assessed correctly or not? - Held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants are cable operators providing cable services to the subscribers. From the charges for providing the cable services, some portions of the subscription is retained by the appellants and the remaining portion is remitted to Fastway Transmission Pvt. Ltd., the MSO (Fastway) from whom the appellants receive the signals for re-transmission to the subscribers. For the portion remitted to M/s Fastway, M/s Fastway is discharging service tax liability or the consideration received from the appellants and the subscription retained by the appellant, if they are falling below the threshold exemption limit in terms of Notification No. 6/2005-ST dated 1.03.2005, the appellants were not paying service tax on the ground that they are not liable to pay service tax and did not get some registered with the department. On the basis of intelligence, the appellants were asked to provide the details of their activity and immediately, thereafter investigation was conducted at the end of the MSO i.e. M/s Fastway. The revenue collected data from M/s Fastway and for the data supplied by M/s Fastway, various show cause notices were issued to the appellants to demand of service tax on the gross amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crats Pvt. Ltd. 2018 (10) GSTL 401 (SC). He also relied on the decision of the Tribunal in the case of Market Committee vs. CCE-2018 (10) GSTL 363 (Tri.-Chan.). He also relied on the decision of Transpek Silox Industries Pvt. Ltd. Vs. CCE 2018 (17) GSTL 434 (Tri.-Ahmd.) to say that the appellant is liable to pay service tax only the amounts actually retained by the appellants and not the amounts remitted to the MSO, i.e. Fastway. 5. He further submitted that the extended period of limitation is not invokable as there was a bonafide belief on the part of the appellants that they are not liable to discharge service tax, as they are entitled for exemption under Notification No. 6/2005-ST dated 1.03.2005. Moreover, there was a confusion in the entire industry with respect to the liability of local cable operators to discharge the service tax. For this, he relied on the decision of the Tribunal in the case of Trans Yamuna Communications Pvt. Ltd. Vs. CST 2017 (52) STR 31 (Tri.-Del.), Krishna Satelite Cable Network vs. CCE 2008 (12) STR 605 (Tri.-Del.), Dinesh Cable Network vs. CCE 2012 (4) TMI 471 (CESTAT, New Delhi) and Final Order dated 27.07.2017 in the case of Pan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay service tax on the gross value of subscriptions received from the subscribers without any exemption which the appellants were failed to do so. Therefore, the extended period of limitation is rightly invoked. 10. Heard the parties and considered the submissions. 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) Whether the extended period of limitation is invokable or not? c) Whether the best judgement under Section 72 of the Finance Act, 1994 has been assessed correctly or not? d) Whether the appellants are liable to pay service tax on the gross value of the services provided by them or not? e) Whether the appellants are entitled for cenvat credit of service tax paid by the MSO or not? 12. 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 20.06.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the manufacturer of those products. Further, in the case of Maheshwari Industries (supra), the Hon ble Apex Court observed the criteria for use of brand name which is as follows:- 1) It must be a name or mark such as symbol, monogram, label, signature or invented word or writing; (2) It must be used in relation to such specified goods, for the purpose of indicating a connection in the course of trade between such goods and some person using such name or mark, with or without any indication of the identity of that person; and (3) The mere fact that the spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under Section 2(aa) of the said Act there is a possibility of bona fide belief for non-tax liability. Considering the ratio followed by the Tribunal in the abovementioned cases and also considering the facts of the present case, I find that it is a fit case for invoking the provision of Section 80 for waiver of penalties imposed on the appellant. Accordingly, the penalties are set aside and the appeal is allowed only to that extent. Therefore, no penalty is imposable on the appellants. c) Whether the best judgement under Section 72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 for the appellants. Therefore, the service tax paid by the MSO is available as cenvat credit to the appellants. In these circumstances, we hold that the appellants are entitled to avail cenvat credit of the service tax paid by the MSO. 13. In view of the above, the following order is passed:- a) the appellants 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) the extended period of limitation is not invokable. Consequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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