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2016 (4) TMI 152

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....fit of viewers. The case of Revenue was that the production of these programmes were taxable under Finance Act, 1994 since 2004 under section 65(105)(zzu), i.e., '(zzu) to any person, by a programme producer, in relation to a programme' With section 65(86b) defining a programme producer as "(86b) 'programme producer' means any person who produces a programme on behalf of another person' And programme being '(86a) 'programme' means any audio or visual matter, live or recorded which is intended to be disseminated by transmission of electro-magnetic waves through space or through cables intended to be received by the general public either directly or indirectly through the medium of relay stations.' 3. There is no dispute that M/s Balaji Telefilms Ltd produces programmes which is a taxable service under section 65(105)(zzu) of Finance Act, 1994. There is also no dispute that M/s SGL Entertainment Ltd had contracted with the respondent for production of programmes with intent for further distribution. Proceedings were initiated on 15th June 2009 to recover the tax liability that had allegedly not been discharged by the assessee who claimed ....

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....d that the consideration had been received in freely convertible currency. Revenue, aggrieved by the dropping of proceedings, is in appeal before us having reviewed the impugned order in exercise of powers under section 86(2) of Finance Act, 1994. 7. According to the appeal of Revenue, the adjudicating authority is in error and failed to appreciate that the programmes that were exported to Hongkong were beamed backed to India. This, in our considered opinion, is a fallacy that Revenue authorities, steeped as they are in the legacy of tax on 'visibles', are susceptible to. The reviewing authority appears to have ignored the fundamental aspect that the proceedings were initiated under Finance Act, 1994 and that the tax was sought to be levied on taxable services and any adjudication thereon shall necessarily be circumscribed by such. The findings cannot go beyond the services that are taxable under section 65(105) to focus on the manifest form of the service for determination of the usage. Prima facie, we do not find any merit in this line of appeal. We, however, do not fail to consider this in detail. 8. Learned Authorized Representative, while admitting that the transacti....

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..... Commissioner of Service Tax, Mumbai - I - 2015-TIOL-1001-CESTAT-MUM and Commissioner of Service Tax, Mumbai v Greater Pacific Capital Pvt. Ltd. - 2014-TIOL-1726-CESTAT-MUM. In these cases, tax was demanded on consultancy services rendered to overseas entities because Revenue was convinced that the overseas entities have then utilized that resource for investment participation in India and, therefore, did not lie within the ambit of 'used outside India'. The Tribunal had disabused this notion by holding that the terms of the agreement requiring delivery of outcomes to the overseas entity and receipt of consideration from the overseas entity was sufficient to conclude that the services had been delivered outside India. 11. At this stage, we would like to refer to our observation supra that the reviewing authorities had, inappropriately, placed emphasis on the usage by the recipients of the programmes produced by the appellants. We find that the activity that is liable to tax must be one which is specifically listed in section 65 (105) of Finance Act, 1994 and which, with reference to the business of the appellant is described in sub-clause (zzu). The appellant is a 'pr....

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....uthoot Fincorp Ltd. may help in avoiding such arguments in future on the same issue. Xxxxxxx 23.2 xxxxxxx The Appeal could have been disposed of by such brief observations and relying on the following decisions of the Tribunal namely ,- (i) Nipuna Services Ltd. v. Commissioner-2009 (14) S.T.R. 706 (ii) Muthoot Fincorp Ltd. v. CCE Vizag -2010 (17) S.T.R. 303 23.3 Instead we have given more elaborate arguments to reaffirm the finding in the above decisions with the hope that it will clear up the cob-web in the ideas relating to the issue of export of services and will help in deciding such disputes in future." 13. That decision did not consider the flow of money and its ultimate usage reminiscent of the movement of the programme canvassed to the reviewing authority in the present matter. The majority decision of the Tribunal in re Paul Merchants Ltd has laid down that eligibility for exemption of a taxable service as export is predicated upon the providing that specific service to an entity outside India who makes over the consideration for the service so rendered. Therefore, the respondent in this appeal, having completed the rendering of the service of 'programme ....