Cable service tax liability extends to Multi System Operators; input credit defeats the plea of double taxation.

An amended cable-service definition extended taxable service to services provided by a cable operator, including a Multi System Operator, so liability was not confined to services rendered directly to viewers or consumers. On that construction, the Multi System Operator was liable to service tax on the covered cable services. The plea of double taxation also failed because the input tax credit mechanism allowed credit of service tax paid on input services against output tax, and the available administrative clarification supported that position. The challenge to the service tax demand therefore failed on merits.

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Issues: (i) Whether a Multi System Operator was liable to service tax on cable services under the amended definition of taxable service; (ii) whether levy of service tax on the Multi System Operator amounted to double taxation.

Issue (i): Whether a Multi System Operator was liable to service tax on cable services under the amended definition of taxable service.

Analysis: The amended provision defined taxable service to include services provided to any person by a cable operator, including a Multi System Operator. On that wording, liability was not confined to services rendered directly to viewers or consumers. The definition of cable service was also broad enough to cover transmission by cable, including retransmission of broadcast television signals. The petitioners' construction that liability arose only when services were rendered to a consumer was therefore unsustainable.

Conclusion: The Multi System Operator was liable to service tax on the cable services covered by the amended provision, against the assessee.

Issue (ii): Whether levy of service tax on the Multi System Operator amounted to double taxation.

Analysis: The objection of double taxation was rejected because the record showed that credit of service tax paid on input services was available under the credit mechanism and could be utilised against tax on output services. The administrative clarification relied upon by the Revenue also supported this position. Accordingly, the levy did not result in impermissible double burden.

Conclusion: The levy did not amount to double taxation, against the assessee.

Final Conclusion: The challenge to the service tax demand failed, and the petitions were dismissed on merits.

Ratio Decidendi: Where the statute expressly extends taxable service to services provided to any person by a cable operator including a Multi System Operator, liability cannot be avoided by contending that the service was not rendered directly to a consumer; the availability of input credit negates a plea of double taxation.

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