TMI Blog2008 (7) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period 16.7.2001 to 30.4.2005 in respect of what was held to be Broadcasting Service provided by M/s. Vijay Television. The appellants were buying broadcasting time from M/s. Vijay Broadcasting Company (P) Ltd. (Broadcasting Company, for short) and selling slots thereof to various clients (sponsors of television programmes) who also wanted their advertisements to be shown to the public. The impugned demand of service tax is on the charges collected by the appellants from such advertisers/sponsors. In the impugned order, the ld. Commissioner considered the appellants to be a broadcasting agency or organization defined under Section 65 (15) of the Finance Act 1994 and held that they had rendered broadcasting service to the advertisers/sponsors as a taxable service under Section 65(105)(zk) read with the first part of the definition of broadcasting given under Section 65 (14) of the Act as amended (16.7.2001). 2. 18 hours time per day was given to M/s. Vijay Television by the Broadcasting Company under an Agreement dt.1.8.2001. M/s. Vijay Television could get their programmes telecast during such hours by the Broadcasting Company. Out of the broadcasting time proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. This definition of broadcasting under Section 65 (14) of the Finance Act, 1994 has mainly two parts separated by a semi-colon. The second part contains a reference to broadcasting agency or organization . Section 65 (15) defines broadcasting agency or organization as follows; broadcasting agency or organization means any agency or organization' engaged in providing service in relation to broadcasting in any manner and, in the case of broadcasting agency or organization, having its head office situated in any place outside India, includes its branch office or subsidiary or representative in India or any agent appointed in India or any person who acts on its behalf in any manner, engaged in the activity of selling of time slots for broadcasting of any programme or obtaining sponsorships for programme or collecting broadcasting charges on behalf of the said agency or organization; 3. The adjudicating authority has placed the appellants' activity under the first part of the definition of broadcasting under Section 65 (14) and has held that the programme selection and scheduling done by them for telecast thereof by the Broadcasting Company were covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion contained in Ministry's letter F.No. B11/1/2001-TRU dt.9.7.2001 [reported in 2002 (51) RLT M135] wherein the activity of selling time slots was also held to be broadcasting service . The SDR has also referred to the Tribunal's decision in Zee Telefilms case (supra), wherein that party, who were engaged in the activity of selling time slots or obtaining sponsorships for broadcasting of programmes and collecting broadcasting charges on behalf of certain broadcasting companies, were held to have rendered broadcasting service and, consequently, they were held liable to pay service tax on the amount collected by them from advertisers/sponsors. 5. After giving careful consideration to the submissions, we find that the appellants have not made out any case on merits. The Broadcasting Company' was engaged in the business of operating 'VIJAY' television channel and was registered with the department for providing broadcasting service . M/s Vijay Television (appellants), under an agreement, purchased specific time slots from the Broadcasting Company against payment of monetary consideration. These time slots were used for the telecast of programmes which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he phrase, in any manner used in the above definition is significant in this context. As an agency or organization engaged in providing such service, the appellants qualified themselves to be broadcasting agency or organization . Further, in terms of Section 65 (105)(zk) which made taxable any service provided to a client by a broadcasting agency or organization in relation to broadcasting in any manner, the above service rendered by the appellants to their clients (sponsors/advertisers) was taxable. 7. The learned counsel has argued that the activities carried on by the appellants were specifically covered by a different category of taxable service under Section 65 (105) (zzzm) w. e. f. 1.5.2006 and that, since the pre-existing definition of broadcasting agency or organization remained the same beyond the said date, such activities were not covered by Section 65 (105) (zk) prior to that date. The new provision cited by counsel is the following: Section 65 (105) - Taxable service means any service provided or to be provided- (zzzm) to any person, by any other person, in relation to sale of space or time for advertisement, in any manner; but does not include sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to register themselves with the department for the purpose of payment: of service tax on broadcasting service , that they failed to file service tax returns for the value of taxable service realized by them, that they contravened the provisions of Section 68, 69 70 of the Finance Act, 1994 and that they suppressed facts with intent to evade payment of service tax. The ld. Counsel has pointed out that the Agreement dt.1.8.2001 (SLOT SALE AGREEMENT) between the appellants and the Broadcasting Company was very much known to the department and, therefore, the Commissioner's finding of suppression of facts with intent to evade payment of service tax is not sustainable We have perused this Agreement. Article 2 1 of this agreement provided that programmes supplied to the Broadcasting Company would be telecast on the channel during the time slots on the basis of schedules to be decided by M/s. Vijay Television and communicated to the Broadcasting Company. Article 3.2 of the Agreement provided for advertising entitlements to be utilized exclusively by M/s. Vijay Television who could, at their discretion, sell time slots directly or through sales agents on such terms and conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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