TaxTMI 
TaxTMI 
2020 (3) TMI 84
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....coverable from M/s Sahara India T V Network, Mumbai 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/....
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....der, appeared to be provision of an infrastructural support to the business of the appellant i.e. broadcast of T V channel, and 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 amo....
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....This view is also as per the decisions in following cases • Air Liquid North India (P) Ltd [2017 (4) GSTL 230 (TDel)] • Dish TV India Ltd [2015 (38) STR 857 (T-Del)] • Mundra Port& Special Economic Zone Ltd [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 deman....
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....cisions as follows: • Hospital Mazdoor Sabha & Others [(1960) 2 SCR 866] • Indus Towers Limited [2014 (35) STR 459 (Del)] • Indus Tower Limited [2017 (52) STR J81 9SC)] • Indus Tower Ltd [2012 (285) ELT 3 (Kar)] • Tower Vision India Pvt Ltd [2016 (42) STR 249 (TLB)] • Essar Telecom Infrastructure Pvt Ltd [2015 (40) STR 591 (T-Mum)] • Sahara India TV Network [Final Order No 71339/2018 dated 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 Mumba....
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....hat they have conferred the jurisdiction in respect of the issue to Noida Commissionerate. 4.3.3 In case of multiple registrations of the same entity in different jurisdictions each jurisdiction in which the unit/ person is registered is having jurisdiction over the transactions entered into by the unit/ registrant in that jurisdiction. Commissioner has in para 28 &29 of his order recorded as follows: "28. The noticee has also stated that similar service received by M/s Sahara India TV Network, Noida registered separately as Service Tax assessee at Noida has been classified under Business Support Service for the purposes of levy of Service Tax and 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....
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....bai and not of Noida. When the appellant themselves recognize that these services are being received by them for providing the Broadcasting Services from their registered premises at Mumbai, the issue of jurisdiction needs to be decide accordingly. 4.3.6 We have also examined the ST-2 certificates of Appellant issued from Mumbai, as per the ST-2 certificate issued Address of the Business Premises is same as that indicated on the invoices. Interestingly, though Appellants had taken centralized registration at Noida, they have not indicated said business premise in ST-2 certificate issued at Noida. The business premise in Mumbai from where they were providing the taxable services including the Broadcasting Services was indicated as "Sahara India TV Network, B-12, 1st Floor, Ghanshyam 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 w....
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....tions of assessment, which of course, would include re-assessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of the Act." In our view the said decision do not help the cause of the appellants because in respect of the premises, registered with the Mumbai Service Tax Commissionerate, the power to assess was vested with the Mumbai Commissioner only and hence the proceedings initiated against the appellant by Commissioner in Mumbai cannot be faulted with. 4.4.1 On merits of the issue appellants have argued that services rendered by M/s AsiaSat do not qualify to be Business Support Services 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 order....
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....explanation clearly establishes that the definition of "infrastructural support services" itself is exhaustive and those infrastructural support services which are contentious are specified/ explained in the further inclusive part. Therefore, the expression "infrastructural support services" mentioned in the definition itself is adequate to cover the activities received by the noticee. The essential criteria to be satisfied for classification under the said service is that it should support the business or commerce of the recipient and the emphasis is on "in any manner". 20. CBEC circular issued under D O F No 334/4/2006-TRU dated 28.02.2006 explains the scope of the said service as under: "3.13 BUSINESS SUPPORT SERVICES: Business entities outsource a number of services for use in business or commerce. These services include transaction 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. I....
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....inition by application of principle of "ejusdem genersis" or "noscitur a sociis" (Reliance placed on Hon'ble Apex Court decision in case of Siddheshwari Cotton Mills (P) Ltd [1989 (39) ELT 498 (SC)]). It is thus their argument that such specialized service provided by M/s AsiaSat, cannot be covered by phrase "infrastructure support service", as used in the definition clause. 4.4.4 We have considered the argument of the appellant. However we do not find ourselves to be in agreement with what is stated by them. The principle of "ejusdem genersis" and "noscitur a sociis" are essentially principle of construction of the statue, provide that the words used in a statue should be interpreted along with the words in company which they occur i.e. the word occurring together derive the colour from each other. This essentially mean that the word which are more general in nature get restricted 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....
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....with other words on the principle of their being ejusdem generis with the previous words enumerated". If the object and scope -of the statute are considered there would be no difficulty in holding that the relevant words of wide import have been deliberately used by the Legislature in defining "industry" in section 2(j). The object of the Act was to make provision for the investigation and settlement of industrial disputes, and the extent and scope of its provisions would be realised if we bear in mind the definition of "industrial dispute " given by Section 2(k), of "wages" by Section 2(rr), "workman" by Section 2(s), and of "employer" by Section 2(g). Besides, the definition of public utility service prescribed by s. 2(m) is very significant. One has merely to glance at the six categories of public utility service mentioned by Section 2(m) to realise that the rule of construction 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....
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....ative and office related support. The type of activities like putting up and managing gas storage facility in industrial unit are not fitting into overall scope of the infrastructural support service as contemplated by the inclusive definition given in the explanation. We note that though the activities of the appellant, can be brought under very generic understanding of infrastructure support, when examined with statutory scope as per explanation indicating nature of services which are to be brought under tax net than it would appear that the present activity will not get covered under the said tax entry. We also take note that in legal interpretation, there are situation where the word 'includes' in certain context be a word of limitation (South Gujarat Roofing Tiles Manufactures- 1997 (1) SCR 878). In certain situations the nature of included items would not only partake of the character of the whole, 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 ....
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....proposed changes and without the prior written consent of AsiaSat, which consent AsiaSat shall not unreasonably withhold. The Customer shall conform to the parameters as set out in Annex 5 when being availed of the Transponder Capacity. 2.3 (a) The Customer will follow practices and procedures established by the ITU for frequency coordination and will not do anything to the Transponder Capacity in any manner that would harm the Transponder Capacity or cause interference to any other transponder capacities on the Satellite, or any other satellites. The Customer shall configure, equip and operate its transmit earth facilities to confirm to the technical parameters of the Satellite, and to follow AsiaSat's procedures for transmission to the Satellite as set out in Annex 1 (as may be revised from time to time to conform with ITU regulations and recommendations). The Customer shall be responsible for the acts and omissions of any 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....
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....stitute Transponder or Substitute Transponder Capacity are not materially and adversely different to the performance specifications of the Transponder as specified in Appendix 1 or the Transponder Capacity, as the case may be. Upon any such change in Transponder or Transponder Capacity, all rights and obligations of the Parties hereunder shall apply in all respects to such Substitute Transponder or Substitute Transponder Capacity and shall be otherwise unaffected by such change in the Transponder or Transponder Capacity, as the case may be, and from the date the Customer has migrated to the Substitute Transponder or Substitute Transponder Capacity, as the case may be, all references in the Agreement to "Transponder", "Transponder Capacity" and "Annexes" shall be deemed to be references to the Substitute Transponder, Substitute Transponder Capacity and the annexes in respect of such Substitute Transponder or Substitute Transponder Capacity, respectively. (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 t....
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....onferred on the sharing operator/mobile operator. What is permitted under the contract is, a permission in the nature of a licence to have access to the passive infrastructure and permission to keep the equipments of the mobile operator in the pre-fabricated shelter with permission to have ingress and egress only to the authorised representatives of the mobile operator. It is because an owner of a property has a bundle of rights, namely right to possess, right to use and enjoy, right to usufruct, right to consume, to destroy, to alienate or transfer, etc.. Therefore, to constitute a deemed sale under Article 366(29A)(d) having regard to the object with the 46th Constitutional Amendment was inserted, it is clear the right that is transferred under a contract should be a bundle of rights minus right to title. It is because of the earlier Constitution Bench judgment of the Apex Court where the right to use the property was transferred by the person who retained the title as 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....
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....haring telecom operators. Strong reliance, inter alia, was placed on the judgment dated 07.09.2011 of the Karnataka High Court reported as Indus Towers Ltd. vs. Deputy Commissioner of Commercial Taxes Enforcement, 2012 (285) ELT 3 (Kar), a judgment which disposed of several writ appeals filed by different petitioners of which the present petitioner was one. It was pointed out that the terms and conditions of the MSA were examined by the Karnataka High Court which came to the conclusion that no transfer of any right to use the goods was involved. It was submitted that the Karnataka High Court (supra) has concluded, for reasons stated in the judgment, that the petitioner provided services in relation to site access, power conversion, air- conditioning and safe keeping for which it received a consolidated service revenue from the sharing telecom operators and that there was neither a sale of goods nor a deemed sale so as to attract levy of tax under the Karnataka Value Added Tax, 2003. 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....
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....erators did not therefore, have any right to use the passive infrastructure, 22. A careful perusal of the judgment of the Karnataka (supra) shows that the following propositions were laid down: - a) No operation of the infrastructure is transferred to the sharing telecom operator. The latter is only provided access to use the passive infrastructure, but Indus has retained the right to lease, licence etc. the passive infrastructure to any advertising agency; b) The entire infrastructure is in the physical control and possession of Indus at all times and there is no parting of the same nor any transfer of the right to use the equipment or apparatus; c) The permission granted to the telecom operator to have access to the passive infrastructure for limited purposes is loosely termed by the taxing authorities as "a right to use the passive infrastructure"; d) There is no intention on the part of the Indus to transfer the right to use; it is only a licence or an authority granted to telecom operator 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 whic....
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....ver have, any right, title or interest over the site or the passive infrastructure. The Clause also takes care to declare that the sharing operator shall not be deemed to be the tenant of petitioner and no tenancy rights shall be deemed to exist over the site/passive infrastructure. Clause 2.1.8, presumably by way of abundant caution, states that it is expressly agreed by the sharing operator that nothing contained in the MSA or otherwise shall create any title, right, tenancy, or any similar right in favour of the sharing operator." 4.4.9 In view of the above decisions of High Court we are unable to agree with the submissions made by the Appellant that the agreement between them and M/s AsiaSat, was one transferring right to use and shall be covered by the 366(29A)(d) to be deemed sale of goods and hence cannot be contract for service. Since we refer to the later decisions of High Court of Karnataka than the decision in case of Antrix Corporation Ltd [2010-TIOL- 515-HC-Kar-CT] we have not taken up this decision for analysis. Furthermore the appeal 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 tha....
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.... a)Fraud; or b)Collusion; or c)Wiflful mis-statement; or d)Suppression of facts; or e)Contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of Service Tax." Thus it is very clear from the seriatim listing of the situations mentioned against (a) to (e) under the proviso clause to Section 73(1) that these are independent of each other and existence of any/each of the situations specified against (a) to (e) above, is individually good enough to attract demand for extended period under the proviso clause to Section 73(1). In other words, "suppression of facts" alone is a reason sufficient enough to invoke this clause; there is no need to prove that there was "willful mis-statement" too. 38. There is no material to establish that non-payment of Service Tax is on account of bonafide reasons. In fact, the noticee argues that no service tax is payable. On the other hand, there are adequate evidences to establish the fact of suppression of material facts and contravention of provisions of law with intent to evade payment of Service Tax leading to nonpayment of Service Tax. ....
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....plete agreement with the findings recorded by the Commissioner. If the argument of revenue neutrality was to be considered a valid argument under the scheme of Finance Act, 1994, then entire provisions relating to payment of service tax on reverse charge will become otiose and every service recipient will claim that what so ever service tax he pays on reverse charge basis will be available to him as CENVAT Credit. Argument of revenue neutrality thus would not be available in case where the service tax is demanded by the recipient of service on the reverse charge basis. Hon'ble Supreme Court has in case of Star Industries [2015 (324) ELT 656 (SC)] dismissing the argument of revenue neutrality held as follows: "35. It was submitted by the learned counsel for the assessee that the entire exercise is Revenue neutral because of the reason that the assessee would, in any case, get Cenvat credit of the duty paid. If that is so, this argument in the instant case rather goes against the assessee. Since the assessee is in appeal and if the exercise is Revenue neutral, then there was no need even to file the appeal. Be that as it may, if that is so, it is always open to the assessee ....
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....inance Act, 1994. However we do not find any merits in those submissions in view of the decision following decisions: • P V Vikhe Patil SSK [2007 (215) ELT 23 (Bom)] affirmed by the Hon'ble Supreme Court [2016 (335) ELT 196 (SC)]; • Kanhai Ram Thakedar [2005 (185) ELT 3 (SC)] • TCP Limited [2006 (1) STR 134 (T-Ahd)] • Pepsi Cola Marketing Co [2007 (8) STR 246 (T-Ahd)] • Ballarpur Industries Limited [2007 (5) STR 197 (T-Mum)]. 4.7 While discussing the issue in respect of interest under Section 11AB and penalty under Section 11AC of the Central Excise Act, 1944 which are pari-materia to Section 75 and 78 of the Finance Act, 1994, Hon'ble Bombay High Court has in its decision referred in para 4.6 held as follows: "7. Considering the scheme together, it is evident that interest chargeable u/s. 11AB is a sort of civil liability of the assessee, who has failed to pay the duty or who has short paid the duty. This is irrespective of the fact whether such non-payment/short payment is innocent or mala fide. So far as penalty u/s. 11AC is concerned, it is certainly a provision, penal in nature. This is because, it co....
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....is of duty ascertained by himself, was not available to the assessee prior to 11-5-2001. We must say that by insertion of sub-sections (2A) to (2C) and more particularly Explanation (1) to sub-section (2B), the position stands drastically changed. Since there is no liberty to the assessee, who has evaded the duty intentionally, by exercising fraud, collusion etc. for the purpose, the liberty to pay the evaded duty under sub-section (2B) is not available and the terminal portion of sub-section (2B) "......and inform the Central Excise Officer of such payment in writing, who on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid;" cannot render any assistance to such an assessee. In other words, the proceedings of ascertainment of evaded duty, imposition of interest and penalty cannot be dropped by virtue of above terminal clause of sub-section (2B) in the cases of assessees, who had intentionally evaded payment of duty by use of fraud, collusion etc. as contemplated by Section 11AC. In the cases where the finding of fact regarding existence of fraud, collusion, wilful mis-statement/suppression of fact....
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.... public exchequer with himself and which ought to have gone in the pockets of the Central Government much earlier. Upon reading Section 11AB together with Sections 11A and 11AA, we are of firm view that interest on the duty evaded is payable and the same is compulsory and even though the evasion of duty is not mala fide or intentional." 4.8 Since we uphold the invocation of extended period of limitation in respect of the show cause notice dated 08.04.2013, the penalties imposed under Section 78 cannot be faulted with in view of the above referred decision of the Hon'ble Bombay High Court and the decision of Hon'ble Supreme Court in case of Rajasthan Spinning and Weaving Mills [2009 (238) ELT 3 (SC)]. 4.9 Penalty has been imposed by the Commissioner under Section 77 for various infractions noticed in complying with provision of law. For imposing penalty under Section 77 Commissioner has recorded as follows: "45. The Show Cause Notices also proposed penalty action under Section 77 of the Finance Act, 1994. It is observed from the records that the Noticee has failed to obtain Service Tax registration in respect of the Business Support services received by them from the ....
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....ner in his impugned order, penalties as imposed under Section 77(2) are justified. 4.10 Commissioner has in para 47 of his order recorded as follows for imposing penalties under Section 76 of the Finance Act, 1994. "47. As regards penalty proposed under Section 76 of the Finance Act, 1994 in the Show Cause Notice dated 07.04.2014, any person liable to Service Tax fails to pay the same is required to pay the same is required to pay penalty under Section 76 at the rate specified therein from time to time, in addition to Service Tax and the interest thereon." Hon'ble Kerala High Court has in case of Krishna Poduval [2006 (1) STR 185 (Ker)] held as follows: "11. The penalty imposable under S. 76 is for failure to pay service tax by the person liable to pay the same in accordance with the provisions of S. 68 and the Rules made thereunder, whereas S. 78 relates to penalty for suppression of the value of taxable service. Of course these two offences may arise in the course of the same transaction, or from the same act of the person concerned. But we are of opinion that the incidents of imposition of penalty are distinct and separate and even if the offences are com....