2016 (4) TMI 454

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....hey have entered into agreements with various foreign broadcasters. As per these agreements, the respondents were appointed as exclusive distributors of T.V. channels broadcast by the foreign broadcasters in India. The respondents were to promote, market, sell and distribute the channels; collect the subscription revenue; use channel marks and other promotional materials. The respondents retained 15% of total subscription revenue collected through cable operators and MSOs and remitted the remaining revenue to the foreign broadcasters. 3. Revenue entertained a view that the respondents were liable to pay service tax for the period April, 2003 to 13.07.2005, though the respondents have registered and paid service tax w.e.f. 14.07.2005. The....

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....vice Tax is very clear. In the appeal by Revenue, there appears to be a mis-appreciation of the facts to the effect that the respondents tax liability is being decided treating them as MSO. This is not correct. Ld. Counsel categorically stated that they are agents of foreign broadcasters and are rightly discharging service tax under such category all along. The amount collected from MSOs and cable T.V. Operators by the respondent are subjected to tax. He pleaded that the appeal by the Revenue is without merit. We find that the Original Authority has examined the issue in detail and arrived at the conclusion based on the legal provisions as clarified by the Board. For better appreciation, the relevant portion of the impugned order is reprod....

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....receive signal was subject to service tax only with effect from 16th June, 2005 when the definition of taxable service of broadcasting was amended and the amount collected from MSOs/cable operators by broadcasters for permitting right to receive signals was made taxable. 3.3.3 The letter bearing F.No.149/5/2006-CX.4 dated 9th June, 2006 dealt with the doubt regarding the scope of "Broadcasting Services" as it was prior to amendment to the definition of the said taxable service in 2005 Budget. It was opined by a subordinate formation that even prior to 16th June, 2005, the subscription charges collected by the broadcasters from Multi Service Operator (MSO's) or cable operators were subject to service tax and that the amendment made ....

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....This was also mentioned that the issue had also been clearly brought in circular No.B1/6/2005-TRU dated 27.07.2005." 8. We find that in the grounds of appeal the Revenue contended that the respondent is not an MSO but a representative or agent for foreign broadcasters. It is clear that the respondents were discharging service tax arising out of their role as agent of foreign broadcasters and there is no dispute on that account. We find that the Boards Circular was wrongly interpreted so as to refer with reference to the services provided by the MSOs. 9. It is clear from the clarification issued by the Board that the charges recovered from the broadcasting agencies from MSOs for providing the signals had been made specifically liable ....