TaxTMI 
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2020 (3) TMI 84
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.... 400104. 48.2(a) I order recovery of interest at the appropriate rat, on the amount confirmed at par 48.1(a) above from the due date(s) under the provisions of Section 75 of the Finance Act, 1994, from M/s Sahara India T V Network, Mumbai 400104. 48.3(a) I impose penalty of Rs. 10,000/- (Rupees Ten Thousand Only) under Section 77 of the M/s Sahara India T V Network, Mumbai 400104. 48.4(a) M/s Sahara India T V Network, Mumbai 400104, shall also pay appropriate late fee for each return at the rate specified in Rule 7C of the Service Tax Rules, 1994 during the relevant period, subject to a maximum of Rs. 20,000/- (Rupees Twenty Thousand only), specified under Section 70 of the Finance Act, 1994, for their failure to file periodical returns. 48.5(a) I impose penalty of Rs. 3,94,10,566/- (Rupees Three Crore Ninety Four Lakhs Ten Thousand Five Hundred and Sixty Six Only) on M/s Sahara India T V Network, Mumbai 400104, under Section 78 of the Finance Act, 1994 II. Statement of Demand/SCN under Section 73(1A) of The Finance Act, 1994 issued under F.No ST-II/Dn- IV/Gr.II/Shara/04/EA2000/SCN12-13/2013-14 dated 07.04.2014 amounting to Rs. 1.41,31,667/- for the period June 2012 ....
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....d the service was appropriately classifiable as "Support Services for Business or Commerce" as defined under Section 65(105)(zzzq) of the Finance Act, 1994. 2.4 Since AsiaSat was not having any establishment in India, Appellant was required to discharge the service tax liability as recipient of the services as per Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from outside India and received in India) Rules, 2006. 2.5 By not discharging the service tax liability in respect of the services so received by them appellant had contravened various provisions of Finance Act, 1994 and Service Tax Rules, 1994. Thus a Show Cause Notice dated 08.04.2013 was issued to them asking them to show cause as to why:- * Service tax amounting to Rs. 3,94,10,566/- not paid by them in respect of the said services received by them during the period April 2008 to June 2012 should not be demanded and recovered from them by invoking proviso to Section 73(1) of the Finance Act, 1994; * Interest on the amounts of service tax not paid by the due date be not demanded and recovered at appropriate rate as per Section 75 of the Finance Act, 1994 * Penal....
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....td [2012 (27) STR 171 (T-Ahm)] * M/s AsiaSat has transferred the "right to use" of transponder, hence no service tax is payable. As per clause (d) to Article 366(29A) of the Constitution of India, such transaction of transfer of right to use is deemed to be sale and thus not leviable to service tax. In case of Imagic Creative Ltd [2008 (9) STR 337 (SC)] it has been held that if the transaction is considered as "sale", it cannot be considered as "service". * Hon'ble Karnataka High Court has in case of Antrix Corporation Ltd [2010-TIOL-15-HC-Kar-CT] held that leasing of transponder of INSAT Satellites amounts to transfer of right to use the goods. Hence, their agreement with AsiaSat is a transaction for sale and no service tax is payable. * There is duplication of demand as the demand of same service tax in respect of the payments made to AsiaSat was also made by Commissioner Central Excise NOIDA. The demand confirmed is under challenge before CESTAT Allahabad. Parallel proceedings cannot be pursued for the same matter pertaining to the same period as per the following decisions * Paro Food Products [2005 (184) ELT 50 (T-Bang)] * Solitaire Machine Tools Ltd [2008 (222)....
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....5.07.2018 of CESTAT Allahabad Bench.] 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments on appeal. 4.2 The matter was earlier heard by the co-ordinate bench and written submissions dated- * 10th October 2018 and 29th October 2018 were made by the appellant counsel; * 18.12.2018 were made by the learned Authorized Representative; These written submissions have also been taken on record while considering the matter. 4.3.1 Appellants have during the course of hearing submitted a chart showing the duplication of demand by way of Show Cause Notice issued by NOIDA Commissionerate and that issued by the Mumbai Commissionerate. We reproduce the relevant extract of chart as produced by the appellant counsel below: Payment Date SN of Annexure to SCN Amount (Inclusive of TDS) Service Tax Demand Remark Mumbai Noida Mumbai NOIDA Mumbai Noida 16.04.08 1 9 15104554 16894580 1866923 2088170 1 10.07.08 2 10 18001357 18001357 2224968 2224968 - 15.12.08 3 11 20580606 20580606 2543763 2543763 - 20.02.09 4 12 21093473 21093473 2607153 2607153 - ....
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....nd accordingly the Commissioner of Central Excise an Service Tax, Noida confirmed the demand of Service Tax for the Service Tax registration pertaining to Noida vide Order in Original No 08/Commissioner Noida/2013-14 dated 17.06.2013 on the following grounds:- * The services provided by AsiaSat are of infrastructural support to the business of TV Channel * Admittedly, Broadcasting cannot b done without uplinking to the satellite. * The transponder of AsiaSat is an infrastructural requirement which allows TV Channels to be viewed. * The definition of Business Support Services clearly states that the support service provided in relation to Business or Commerce, in any manner is covered under this service. 29. The noticee have contended that service tax amounting to Rs. 23,992,295/- was demanded both by Noida and Mumbai authorities. AsiaSat issued invoices to Sahara India Commercial Corporation Limited, Sahara India T V Network, Noida quoting the PAN Number as AADCA7848N. The PAN Number for the purpose of Service Tax registration at Mumbai is AADCS6118F. Service Tax registration numbers of NOIDA and Mumbai are different. Therefore the contention that demand of Rs. 23,92....
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....am Chamber, Opp City Mall, New Link Road, Lokhandwala, Andheri (West), Mumbai. Address of the premises or office paying service tax under centralized billing or centralized accounting under sub-rule (2) and (3A) of rule 14 of the Service Tax Rules, 1994 on the ST-2 certificate issued from Noida is indicated as "Sahara India Complex, C-2, C-3, C-4, Sector 11, Noida." While the ST-2 Certificate at Mumbai was issued on 01.01.2002 and last amended on 19.09.20014, that issued at Noida was issued on 16.09.2006 and last amended on 29.01.2014. These facts clearly show the existence of the premises indicated on the invoices issued by M/s AsiaSat and mentioned at Sl No 1 to 14 as separate registrant for the purpose of providing taxable service and registered in the jurisdiction of Mumbai Commissionerate. In our view the jurisdiction in respect of these 14 invoices to demand service tax on reverse charge basis vests with the Mumbai Commissionerate only. In respect of the invoices mentioned at Sl No 15, 16 & 17 which are in the name of the appellants registered premises as per the registration certificate issued by the Noida Commissionerate the jurisdiction will vest with the Noida Commissione....
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....vices as defined by the 65(105)(zzzq) of the Finance Act, 1994. The definition as incorporated in the Finance Act, 1994 is reproduced below: "Section 65(104c) of the Finance Act, 1994 "Support Services of Business or Commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation -For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security; Section 65 (105) (zzzq) of the Finance Act, 1994 "Taxable Service" means any service provided or to be provided to any person, by any other person, in relatio....
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....ion processing, routine administration or accountancy, customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing instant offices along with secretarial assistance known as "Business Centre Services". It is proposed to tax all such outsourced services. If these services are provided on behalf of a person, they are already taxed under Business Auxiliary Service. Definition of support services of business or commerce gives indicative list of outsourced services." 21. The CBEC vide Circular No 109/3/2009-ST dated 23.02.2009 further clarified that Business Support Service is a generic service of providing support to the business or commerce of the service receiver. In other words, the principal activity is to be undertaken by the client while the service received is to support the business or commerce of the recipient. Thus the infrastructural support services are those services which are often outsourced and used for the business activity undertaken by the client. 22. In the instant case, the noticee applied for and obtained Service Tax registration for providing Broadcasting service. The notic....
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....stricted by the other words used therein. However the said principles are not applicable when the words used in the statute are simple plain and clear. Hon'ble Supreme Court has in case of Hospital Mazdoor Sabha & Others [(1960) 2 SCR 865] in para 9 held as follows: "It is, however, contended that, in construing the definition, we must adopt the rule of construction noscuntur a sociis. This rule, according to Maxwell, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in " Words and Phrases " (Vol. XIV, P. 207): "Associated words take their meaning from one another under the doctrine of noscuntur a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broader than the maxim Ejusdem Generis." In fact the latter maxim "is only an illustration or specific application of the broader maxim noscuntur a sociis". Th....
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....on which the appellant relies is inapplicable in interpreting the definition prescribed by Section 2(j)." In the Siddheshwari Cotton Mills (P) Ltd [1989 (39) ELT 498 (SC)], Hon'ble Supreme Court has applied the principle of "Ejusdem Generesis" for interpreting the phrase like "or any other process" as is evident from the para 8 of the decision reproduced below: "8. The preceding words in the statutory provision which, under this particular rule of construction, control and limit the meaning of the subsequent words must represent a genus or a family which admits of a number of species or members. If there is only one species it cannot supply the idea of a genus. In the present case the expressions bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink-proofing, organdie processing' which precede the expression 'or any other process' contemplate processes which impart a change of a lasting character to the fabric by either the addition of some chemical into the fabric or otherwise. 'Any other process' in the section must, share one or the other of these incidents. The expression "any other process" is used in the context of what cons....
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...., but may be construed as clarificatory of the whole. In the present case even considering the explanation for infrastructural support service is only defined in an inclusive way, still it will not be incorrect to hold such inclusive definition will throw light upon what are all the nature of services which are sought to be taxed." In our view the said decision do not lay down that office should be provided as must for the service to be classified under the category of "infrastructure support service". Nor do the explanation to Section 65(104c) state so. In the case of South Gujarat Roofing Tiles Manufactures, relied upon by the bench while passing the said decision, Hon'ble Supreme Court was interpreting the entry 22 of Minimum Wages Act, 1948 and held that the items included in it were plainly comprised in the expression 'potteries industry' which showed that the word 'includes' was not to extend the normal meaning of this expression. The conclusion was that the word includes was used in the explanation in the sense of 'means' and the definition provided by the explanation was exhaustive. From the explanation, it is evident that "infrastructure support service" has been defined....
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....third parties that it retains for such transmission. (b) The Customer shall prior to being availed of Transponder Capacity provide AsiaSat with the Customer's written transmission plans in sufficient detail to enable AsiaSat to ensure that the availability of the Transponder Capacity to the Customer does not or will not cause interference with other customers on the satellite or other satellites nor adversely affect AsiaSat's ability to co-ordinate the satellite with other satellite operators. Following receipt of such details, AsiaSat shall promptly notify the Customer in writing whether the transmission plans are acceptable to AsiaSat and, if not, shall notify the Customer in sufficient detail to enable the Customer to amend the transmission plans and submit such amendments until final acceptance by AsiaSat. Thereafter, the Customer shall not amend, modify or alter its transmission plans (which shall include a change of plans due to migration to Substitute Transponder Capacity or transponder capacity on any Replacement Satellite) without AsiaSat's prior approval and AsiaSat shall respond with reasonable promptness to requests from the Customer to approve amended transmission p....
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..... (b) AsiaSat shall give the Customer as much notice as possible in the circumstances of its intention to take action under paragraph (a) of this Clause 2.5 and use its reasonable endeavours to minimise the inconvenience to the Customer" From the above agreement, it is quite evident that M/s AsiaSat has just granted right to use passive infrastructure of Transponder Capacity available on its Satellite. Hon'ble Karnataka High Court has in case Indus Tower Ltd [2012 (285) ELT 3 (Kar)] specifically held that such transaction is not within the ambit of Article 366 (29A)(d) of the Constitution of India. Hon'ble High Court has held as follows: "63.The right conferred by the assessee on the mobile operator is in the nature of a personal right granted to him to do something upon the passive infrastructure belonging to the assessee. It does not amount to creation of an interest in the passive infrastructure itself. It is purely a permissive light and is personal to the grantee. The licence has no other effect than to confer a liberty upon the licensee to go upon the land which would otherwise be unlawful. A dominant legally creating leave and licence in favour of the licensee cannot....
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.... only a nominal owner with the benefit of the goods has been passed on to the transferee, without paying taxes to the exchequer, that the Constitution was amended to bring within its fold such transactions which are styled as deemed sales. Therefore, in deciding whether a transaction falls within Article 366(29A)(d) so as to constitute a deemed sale, the purpose of the 46th Amendment, the mischief sought to be remedied and the object sought to be achieved by the said provision cannot be lost sight of. In that background, in the facts of this case, if we look into the various terms of the agreement it is clear under the contract, the assessee has not transferred any right in the passive infrastructure to the mobile operators. The right that is conferred on the mobile operator is a permission to have access to the passive infrastructure, a permission to keep the active infrastructure in the site belonging to the assessee, a permission to mount the antennae on the tower erected by the assessee and to have the benefit of a particular temperature so as to operate the equipments belonging to the mobile operator. No sale of goods or transfer is involved in the transaction in question. The....
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.... 18. ............. 19. We are in respectful agreement with the view taken by the Karnataka High Court in the judgment sited (supra). The right to use the goods - in this case, the right to use the passive infrastructure - can be said to have been transferred by Indus to the sharing telecom operators only if the possession of the said infrastructure had been transferred to them. They would have the right to use the passive infrastructure if they were in lawful possession of it. There has to be, in that case, an act demonstrating the intention to part with the possession of the passive infrastructure. There is none in the present case. The passive infrastructure is an indispensible requirement for the proper functioning of the active infrastructure which is owned and operated by the sharing telecom operators. The passive infrastructure is shared by several telecom operators and that is why they are referred to as sharing telecom operators in the MSA. The MSA merely permits access to the sharing telecom operators to the passive infrastructure to the extent it is necessary for the proper functioning of the active infrastructure. The MSA also defines "site access availability" as m....
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....r as defined in Section 52 of the Easements Act, 1952. A licence cannot in law confer any right; it can only prevent an act from being unlawful which, but for the licence, would be unlawful. A licence can never convey by itself any interest in the property; e) The entire MSA has to be read as a whole without laying any undue emphasis upon a particular word or clause therein. What is permitted under the MSA is a licence to the telecom operators to have access to passive infrastructure and a permission to keep equipments of the sharing telecom operator in a prefabricated shelter with provision to have ingress and aggress only to the authorised representatives of the mobile operator." 4.4.8 Hon'ble Madhya Pradesh High Court has in case of Bharti Infratel Ltd [2018 (17) GSTL 225 (MP)](Affirmed by Hon'ble Supreme Court as reported in {2018 (17) GSTL J51 (SC)] held as follows: "35. We are in respectful agreement with the view taken by the Karnataka High Court in the judgment sited (supra). The right to use the goods - in this case, the right to use the passive infrastructure - can be said to have been transferred by the petitioner to the sharing telecom operators only if the poss....
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....l filed in the matter has been admitted by the Hon'ble Apex Court as reported at [2018 (361) ELT A63 (SC)]. 4.4.10 We also note that CESTAT Allahabad has in the Appellants own case for their Noida Registration has upheld the demand of Service Tax on merits. In our considered opinion the services rendered by M/s AsiaSat to appellant are nothing but "infrastructure support services" for supporting the business of broadcasting services undertaken by the appellants. Thus these services are appropriately classifiable as "Business Support Services" by the Section 65(104c) of the Finance Act, 1994 and taxable as per Section 65 (105)(zzzq) ibid. 4.4.11 Since the service provider i.e. M/s AsiaSat do not have any fixed business establishment in India, appellants as recipient of service are required to discharge the service tax liability as per Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from outside India and received in India) Rules, 2006. 4.5.1 Appellants have argued that certain portion demand made vide show cause notice issued from F No. STII/ Audit/Gr.6/98/SITV/11-12/Pt.I dated 08.04.2013 is barred by limitation. The only argume....
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....with intent to evade payment of Service Tax leading to nonpayment of Service Tax. 39. It has been alleged that the Noticee have not obtained Service Tax registration in respect of 'Business Support Service' for payment of Service Tax; they failed to disclose the fact that they had been receiving the said services; they failed to declare the correct value of the taxable services received by them from their foreign service provider; they have not assessed the Service Tax correctly and not paid the same within the time limit prescribed; they have not furnished to the Department ST- 3 returns-with the full and correct details of services rendered by them and thereby willfully contravened the provisions of law with intent to evade payment of due Service Tax. 40. Requirement under law to file proper ST-3 returns with full disclosure is not a mere procedural formality but a statutory requirement. In the instant case, the Noticee has not paid Service Tax on the value (amounts) paid by them as consideration for taxable service, classifiable under 'Business Support Service' services received from their foreign service provider, viz., AsiaSat. The department had no knowl....
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....it may, if that is so, it is always open to the assessee to claim such a credit." 4.5.4 In case of Dharampal Satyapal [2005 (183) ELT 241 (SC)] Supreme Court has dismissed the argument of revenue neutrality on the basis of availability of MODVAT Credit stating as follows: 25.Modvat is basically a duty collecting procedure which provides relief to the manufacturer on the duty element borne by him in respect of the inputs used by him. The relief is given under the modvat scheme on the actual payment of duty on the input. On such payment, the assessee gets a right to claim adjustment/set-off against the duty on the final product. The question of duty adjustment/set-off against duty on the final product was not in issue. In any event, no record on credit entitlement was produced. A right to claim proforma/modvat credit against duty on final product was different from the defence of bonafides in a case where circumstances mentioned in the proviso to section 11A(1) stands proved by the department for invoking larger period of limitation. The burden to prove the defence of bonafides was on the assessee and the assessee in this case has failed to prove its bonafides. Under modvat, exc....
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....lay only when non-payment/short payment is result of fraud, collusion or any wilful misstatement/ suppression of facts or contravention of any of the provisions of the Act/Rules on the part of the assessee, with intent to evade payment of duty. There is a sense of deliberate evasion and scheming for the purpose on the part of the assessee and that is why in that case, there is no discretion to impose penalty lesser than 100% or 25% in case duty determined is paid within 30 days from the date of determination. The distinction of civil liability and criminal liability stands further demonstrated by Explanation (1) to subsection (2B) of Section 11A, which reads thus : "Explanation (1): Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short levied or was short paid or was erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty." 8. The ratio laid down in the matter of Rashtriya Ispat Nigam Ltd. v. Commissioner of Central Excise, Visakhapatnam - 2003 ....
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....the Act or Rules with intent to evade the payment of duty is confirmed, it may not be open to the assessee to claim that no penalty is imposable upon him u/s. 11AC, because of payment of evaded duty before issuance of show cause notice, after amendment as inserted by Act No. 14/2001 with effect from 11-5-2001. As already discussed hereinabove, there is no discretion with the authorities to impose any lesser penalty than 100% and 25% in case duty after being determined u/s. 11A(2), the assessee pays it within 30 days. This answers both the substantial questions of law on which appeal is admitted, so far as penalty imposable u/s. 11AC is concerned." 9. ......... 10. So far as interest u/s. 11AB is concerned, on reference to text of Section 11AB, it is evident that there is no discretion regarding the rate of interest. Language of Section 11AB(1) is clear. The interest has to be at the rate not below 10% and not exceeding 36% p.a. The actual rate of interest applicable from time to time by fluctuations between 10% to 36% is as determined by the Central Government by notification in the Official Gazette from time to time. There would be discretion, if at all the same is incorp....
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....form ST-3 and also failed to pay Service Tax within the prescribed time limit. Thus, they have contravened the provisions of Section 66, 67, 68, 69 and 70 of the Finance Act, 1994 read with Rule 4, 5, 6 and 7 of the Service Tax Rules, 1994. Therefore, they are liable to penalty under Section 77 of the Finance Act, 1994. For the reason of not filing Service Tax Returns, they are also liable to pay appropriate late fee as specified under Rule 7e of Service Tax Rules, 1994 subject to ceiling of Rs. 20,000/- each Return, provided under Section 70 of the Finance Act, 1994." Penalty under Section 77 are civil in nature and are imposed for infractions noticed. Hon'ble Supreme Court has in case of Gujarat Travancore Agency vs. Commissioner of Income Tax [1989 (42) ELT 350 (SC)], Hon'ble Supreme Court held as under: 4. ..........In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by Statute proceeds on the assumption that society suffers injury by and the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. In the case of a proceedi....
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.... of both the offences. There can be a situation where even without suppressing value of taxable service, the person liable to pay service tax fails to pay. Therefore, penalty can certainly be imposed on erring persons under both the above Sections, especially since the ingredients of the two offences are distinct and separate. Perhaps invoking powers under S. 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both of the offences. However, no circumstances are either pleaded or proved for invocation of the said Section also. In any event we are not satisfied that an assessee who is guilty of suppression deserves such sympathy. As such, we are of opinion that the learned Single Judge was not correct in directing the 1st appellant to modify the demand withdrawing penalty under S. 76. Therefore, the judgment of the learned Single Judge, to the extent it directs the first appellant to modify Ext. P1 by withdrawing penalty levied under S. 76, is liable to be set aside and we do so. The cumulative result of the above findings would be tha....