TaxTMI 
TaxTMI 
2019 (10) TMI 535
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....5 (105)(zk) of the Finance Act, 1994, read with Section 65(15) and Section 65(16) ibid; ii. The demand of Service Tax totally amounting to Rs. 134,61,79,597/- (Rupees One Hundred and Thirty Four Crores Sixty One Lakhs Seventy Nine Thousand Five Hundred and Ninety Seven only) made under subject notice is determined and confirmed under Section 73(2) of the Finance Act, 1994, as payable by M/s MSM Discovery Pvt Ltd; iii. I order recovery of the interest at appropriate rate from the due date, on the amount confirmed at para 44(ii) above, from M/s MSM Discovery Pvt Ltd under the provisions of Section 75 of the Finance Act, 1994; iv. I impose penalty under Section 76 of the Finance Act, 1994 on M/s MSM Discovery Pvt Ltd for their failure to pay Service Tax for the period from 01.10.2006 to 09.05.2008 at the rate of 2% per month, subject to maximum service tax not paid for the period upto 09.05.2008; v. I do not impose any penalty under Section 76 of the Finance Act, 1994 on M/s MSM Discovery Pvt Ltd for failure to pay Service Tax in respect of the period 10.05.2008 onwards, as penalty is being imposed under Section 78; vi. I impose a penalty of Rs. 5,000/- (Rupees Five Tho....
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.... the fact about nonpayment of service tax on subscription charges collected towards provision of broadcasting services in respect of MSMPL and DCI; * They had never disclosed the facts about not payment of service tax in respect of subscription charges for the MSMPL and DCI, and have thus suppressed the germane facts with intention to evade payment of service tax. Accordingly notice asked the Appellants to show cause as to why:- * Extended period under sub section (1) of Section 73 of the Finance Act, 1994 should not be invoked to demand service tax evaded by them; * The services provided by them in relation to distribution of television channels belonging to MSMPL and DCI should not be classified under "broadcasting service" as defined under Section 65(105)(zk) of the Finance Act, 1994, read with Section 65(15) and Section 65 (16) ibid; * Service Tax of Rs. 134,61,79,597/- (Rupees One Hundred and Thirty Four Crores Sixty One Lakhs Seventy Nine Thousand Five Hundred and Ninety Seven only) not paid by them on "broadcasting service" provided during the period 01.10.2006 to 31.01.2010 should not be demanded and recovered from them under sub section (1) of Section 73 of F....
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....ded as an agent of MSMPL and DCI and on the agency commission received have discharged the service tax liability under the category of Business Auxiliary Service; * Service Tax on the entire subscription revenue stands discharged under the category of Broadcasting services. As per the agreement dated 5.08.2002 they were required to collect the subscription charges on behalf of MSMPL and DCI and remit the same to tem along with service tax collected from MSOs/ Cos. At the end of every month a monthly statement was prepared by them in which the subscription revenue collected for a particular channel in that month was determined based on the information received from MSOs/ Cos. The said statement was then submitted to MSMPL and DCI stating that the amount collected for their respective channels. On the basis of this statement MSMPL and DCI discharged their service tax liability. This facts was substantiated by submitting the CA Certificates from MSMPL and DCI certifying the amount of service tax discharged by them under the category of Broadcasting Services. * Service tax once discharged by the principal cannot be demanded again from the agent {Jaipuria Infrastructure Developers....
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....scovery)], by SET India Private Limited (SET now MSMPL) and Discovery Communications India (Pvt Co with Unlimited Liability) (Discovery or in short "DCI"), by the agreement dated 5th August 2002. * At 4, the agreement provides "Each partner appoints the JV Vehicle to provide the services in relation to the Channels and JV Vehicle shall, as from the date hereof, provide the services in relation to all of the channel on an exclusive basis. The services shall include in particular (but without limitation) marketing to operators of, the appointment of distributors to license (on behalf of JV Vehicle), the entering into agreements directly with operators in respect of the provision of suitable subscriber management services in respect of and the obtaining of carriage subscription basis in respect of channels in the territory." * Agreement further provides- "7.1 The JV Vehicle hereby agrees an undertakes, in each Accounting Month, to use its best efforts to collect any and all Distribution Revenues and A La Carte Revenue owed by the Operators. In each such Accounting Month the Distribution Revenues shall be distributed to each Partner as follows (irrespective of both the number ....
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....as set out in Monthly Statement. 12. Each Partner warrants and represents to JV Vehicle: (a) that it has full right title and authority to enter in to this Agreement and to appoint the JV Vehicle as its sole an exclusive agent to provide the service. (b) that neither it nor any of its Affiliates shall itself, or shall directly or indirectly authorize any third party to provide the Services in the Territory at any time during the term. 13. The JV Vehicle warrants, represents and undertakes to the Partners that; (a) it has full right title an authority to enter into this agreement. (b) it shall undertake no other activities on behalf of the Partners other than the provisions of the Services; (c) It shall at all times provide the Services to the best of its skill and ability and strictly in accordance with the terms of the Term Sheet which are applicable to the provisions of the services; (d) (without prejudice to (c) above), it shall at all times during the Term market and distribute the Channels to Operators on a non discriminatory basis as between the Channels owned and/ or operated by each Partner and/ or any of its Affiliates; and (e) it shall use all r....
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....It is settled law that in respect of the same service transaction, service tax cannot be demanded both from the principal and agent. * Undisputedly they have discharged the service tax in respect of the commission received by them from Multi Screen Media Pvt Ltd and DCI under the category of Business Auxiliary Service. * The demand made against them is barred by limitation as all the facts where in the knowledge of department and they were regularly filling the service tax returns discharging the service tax liability in respect of Broadcasting Services rendered by them on their account and also the Business Auxiliary Service provided by them. * Since no service tax is due from them penalties imposed under section 76, 77 and 78 of Finance Act, 1994 to cannot survive. In absence of any demand of service tax interest demanded under section 75 should also be set aside. 4.3 Arguing for the revenue learned Authorized Representative submitted14 * The definition of "Broadcasting agency or organization" as per Section 65(16) is wide amplitude and covers any agency or organization engaged in providing service in relation to Broadcasting in any manner. From the provisions of Se....
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....ave failed to furnish complete, correct and proper information in the ST-3 returns filed by them penalty under section 77 is also justified. * Since appellant have short paid the service tax, and amount demanded from them have not been paid within the prescribed period, the demand for interest under section 75 needs to be sustained. 5.1 We have considered the impugned order with submissions made in appeal. Cross objections and during the course of arguments. 5.2 Commissioner has in para 12 of impugned order framed following issues for consideration:- "12. The key issues to be considered in this case are * Whether the services provided by the noticee to MSOs/ Cable Operators in relation to distribution of television channels are classifiable under Broadcasting Service" under Section 65(105)(zk) of Finance Act, 1994 read with Section 65(15) and Section 65(16) ibid; * Whether the noticee is liable to pay the entire amount collected as service tax from MSOs/ COS for the service provided; * Whether the noticee's statutory liability to pay service tax on broadcasting service provided by them, for which Service Tax was charged and collected against their invoice, can be....
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....y Network etc. The channels being offered by the appellant are either in ala carte form or as bouquet of channel to the subscribers. In respect of the channels subscribed by the MSO/ CO, they are paying the subscription fee in respect of all the channels subscribed by them. While entering into agreement with the MSO/ CO the appellants have clearly indicated to the MSO/ CO that they are providing the channels of MSMPL and DCI as their agents, a fact which also appears on the invoices issued by the Appellants to MSO's/ CO's for collection of the subscription charges. In respect of the channels of TV Today Network, no such stipulation is made either in the agreement or the invoices issued. The subscription charges collected by the appellants from MSO's/ CO's are distributed on the basis of agreed formula in three part i.e. (i) those remitted to MSMPL (ii) those remitted to DCI (iii) those which are not remitted to either i.e. in respect of channels of TV Today Network. 5.6 The case of revenue against the Appellants in the present case is that respect of the subscription charges not remitted to MSMPL and DCI, the appellants have paid the service tax declaring the service provided as ....
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....were acting as agent of MSMPL and DCI, that the Service Tax collected against their invoice have been remitted to their said principals, that such income is not reflected in their books of account, that their principals are liable to pay service tax on taxable services provided by them even though service tax is collected by them., the payment of service tax by their principal be verified, that they were receiving agency commission from their principles on which service tax is being paid by them under business auxiliary services etc are of no consequence since such claims or actions in pursuance of internal agreements between independent entities are in contravention of the explicit statutory provisions and not sustainable in law." 5.8 Business Auxiliary Services under which the appellants have paid the Service Tax on the agency Commission has been defined by Section 65 (105) (zzb) read with Section 65 (19) of Finance Act, 1994. It is the claim of Appellants that the services provided by them as commission agent are covered by the definition of business auxiliary services as above as they have provided the services on behalf of their client namely MSMPL and DCI, and also they col....