Broadcasting service tax liability fails where signals bypass the appellant and go directly to cable operators.

Service tax under the broadcasting service entry was held inapplicable where the appellant only acquired distribution rights and passed them on to another Indian entity, while the foreign broadcaster transmitted signals directly to MSOs and cable operators. Liability depended on whether the appellant actually rendered or received the broadcasting service, and the appellant had no role in uplinking, downlinking, or technical receipt of the signals. As the facts were materially identical to an earlier Tribunal decision and no stay of that decision was shown, the demand on this count was set aside and the appeal was allowed.

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Issues: Whether the appellant was liable to service tax under the broadcasting service entry on the fee paid to the foreign entity, when the broadcasting signals were not uplinked to the appellant but were transmitted directly to MSOs/cable operators.

Analysis: The taxable entry for broadcasting service is wide, but liability depends on whether the appellant actually rendered or received the broadcasting service in question. The appellant had only obtained distribution rights and had transferred those rights onward to another Indian entity. The actual transmission of signals was carried out directly from the foreign broadcaster to MSOs/cable operators, and the appellant had no role in uplinking, downlinking, or technical receipt of the signals. The facts were found to be materially identical to the earlier Tribunal decision relied upon, and no stay of that decision had been shown.

Conclusion: The service tax demand on this count was unsustainable and was set aside. The appeal was allowed.

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