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TMI Blog2023 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... mobile telecommunication operators to provide ringtones, pictures, etc., that could be downloaded by the customers from the mobile platform developed, installed and maintained by the appellant, for which the appellant was entitled for revenue sharing at agreed rates per download by those mobile operators. In addition to the above, it appears that the appellant also received the royalty amount payable / paid to the music directors / music companies from the said mobile operators. It further appeared to the Revenue that the appellant had paid Service Tax under business auxiliary service on the revenue share received, as above, and in certain cases, it appeared that the appellant had paid Service Tax on the gross amount received from the mobile telecommunication operators, which included the royalty charges payable / paid to the music directors / music companies. 2.2 It appears that to a query by the Revenue, the appellant responded vide letter dated 16.08.2011 that Service Tax was not payable on the royalty charges as the same was liable to be paid for the services under Intellectual Property Rights (IPR) service, that too only after the inclusion of "copyright" under IPR service wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that the audit party raised the very same issue of non-payment of Service Tax on the royalty amount received and paid by the appellant to the music directors / music companies. 3.2.2 It further appears that thereafter, a letter dated 08.08.2011 was also received from the Superintendent of Service Tax, Group V, Chennai-II Division asking for the details (year-wise) of the royalty paid by the appellant to the music directors / music companies for the period 2006-07 to 2010-11 with a similar allegation that Service Tax payable on the royalty amounts was not paid by the appellant, in response to which it appears that the appellant had also filed its detailed reply dated 16.08.2011. 3.2.3 It also appears that one more letter dated 07.09.2011 issued by the Assistant Commissioner of Service Tax, Chennai-III Division was received by the appellant, seeking details, to which also it appears that the appellant had dutifully responded to. 3.2.4 It appears that the appellant had raised a plea that the re-classification of their activity under business auxiliary service or business support service' prior to the introduction of 'development and supply of content service' was not proper, des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 dated 28.02.2013. The appellant has, therefore, assailed the said Order-in-Original in its appeal before this forum. 5. Today, when the matter was taken up for hearing, Shri N. Viswanathan, Learned Advocate, appeared for the appellant and Smt. K. Komathi, Learned Additional Commissioner, appeared for the Revenue. 6. We have heard the rival contentions and have gone through the documents placed on record, including the order of the lower authority. We have also considered the decisions / orders relied upon by the Learned Advocate for the appellant. 7. After hearing both sides, we find that the issues to be decided by us are: - (1) Whether the demand for the period from 01.05.2006 to 31.05.2007 under 'business support service' and from 01.06.2007 onwards under 'development and supply of content service' on the appellant is correct? (2) Whether the royalty charges received and paid by the appellant to the music directors / music companies were includible in the taxable value? and (3) Whether the Revenue is justified in invoking the larger period of limitation? 8. Paragraph 9.1 of the impugned order reveals that the appellant had offered the tax after registering with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation. 10. In the background of the above discussion, when each and every fact was very much available with the Revenue, what is that which was "suppressed" is not clear. We say so because, the non-payment of Service Tax on royalty having been noticed during audits conducted since 2009 appears to have been pointed to the appellant and the appellant appears to have replied thereto. We, however, would not like to get into the merits or otherwise of such reply, but the fact remains that the Revenue was very much aware of these facts. 11. The proviso to Section 73(1) of the Act, which allows the invocation of extended period of limitation, reads as under: - "Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "one year" the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, 2006, i.e., in the absence of any such Rule, the valuation was to be done as per the provisions of Section 67 of the Act. ....... ....... 24. In this hue, the expression 'such' occurring in Section 67 of the Act assumes importance. In other words, valuation of taxable services for charging service tax, the authorities are to find what is the gross amount charged for providing 'such' taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service cannot a part of that valuation as that amount is not calculated for providing such 'taxable service'. That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasised that Rule 5 of the Rules went much beyond the mandate of Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider 'for such service' and the valuation of tax ..... 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