2006 (8) TMI 63 - AT - Service Tax

Tribunal grants stay, remands case for reevaluation, emphasizes detailed evidence examination.

The Tribunal allowed the stay application and appeal, remanding the matter to the Commissioner for reevaluation. The Commissioner was directed to provide ... Cable operator- Service TAX – Alleged that appellant were liable to pay service tax – After considering all the evidence provided by the appellant matter remanded for reconsideration by commissioner Issues:1. Liability to pay service tax for Cable Operator services and Broadcasting services.2. Dispute regarding the classification of services provided by the appellants.3. Violation of principles of natural justice in the Commissioner's order.Analysis:1. The appellants were required to pay service tax for Cable Operator services and Broadcasting services, as per the Department's claim. The Department alleged that the appellants received 'feed charges and subscription' income, attracting service tax, which had not been discharged. Demands were raised based on these allegations.2. The learned Counsel argued that the appellants were not engaged in the activity of Cable Operator services but were functioning as a Multi System Operator (MSO), which was not covered under the Finance Act for service tax until 10-9-2004. The Counsel contested the liability by stating that they provided services to Cable Operators, who then served the customers.3. The Commissioner's order noted a lack of evidence from the appellants to prove that they received payments for services other than Cable Operator services. The Commissioner highlighted the absence of confirmation or certification by customers regarding services beyond Cable Operator services. The learned Counsel challenged this by asserting that they were not Cable Operators but service providers to Cable Operators, emphasizing a Board's Circular supporting their position.4. The Tribunal found that the appellants had indeed produced evidence demonstrating that they provided services to Cable Operators, who, in turn, served the subscribers. Referring to a Board's Circular, the Tribunal concluded that service tax liability rested with the Cable Operator serving the ultimate subscriber. The Tribunal criticized the Commissioner for overlooking the evidence presented by the appellants, deeming the order as not compliant with principles of natural justice.5. Consequently, the Tribunal allowed the stay application and appeal, remanding the matter to the Commissioner for a reevaluation. The Commissioner was directed to provide an opportunity for the appellants to present their case effectively within four months. The Tribunal emphasized the need for a detailed examination of the evidence presented by the appellants to determine whether they were indeed engaged in Cable Operator services. The decision was made to ensure a fair assessment and compliance with principles of natural justice.