TaxTMI 
TaxTMI 
2026 (9) TMI 87
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....productions of the Tamil serial 'Kolangal', of which the appellant is the copyright owner, after duly dubbing into Telugu/ Malayalam languages. It appeared that the said activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service'. After due process of law, the Ld. Original Authority confirmed the entire demand of service tax for the period 2005-06 to 2009-10 along with interest and also imposed penalty equal to service tax under sec. 78 of the Finance Act, 1994. Against the said order, the appellant preferred an appeal before the Ld. Commissioner (Appeals) who vide the impugned order, upheld the adjudication order. Hence the present appeal. 3. Shri N.K. Bharath Kumar, Ld. Chartered Accountant appeared for the appellant and Shri M. Selvakumar, Ld. Authorized Representative appeared for the respondent. 3.1 The Ld. C.A. Shri N.K. Bharath Kumar appearing for the appellant submitted that in light of the Copyright Act, 1957, copyright qualifies as "goods" as it constitutes intangible property that fu....
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....hi the Tribunal observed that only when the programme is produced on behalf of another person, the said levy of service tax would be attracted. The Ld. Counsel stated that the demand under programme production services is unsustainable and prayed that the same may be set aside. 3.2 Shri M. Selvakumar, Ld. A.R. appeared for the respondent. He reiterated the finding given in the impugned order. 4. We have carefully gone through the appeals and have heard the rival parties. 5. The issue is whether the assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' leviable to VAT or are a service liable to Service Tax. 6. Firstly we find that the appellant produces the programme himself. There is nothing to show that the Tamil serial 'Kolangal' was scripted by or in any way produced on behalf of the Broadcasters, to which the copyright was later assigned. In such a situation as stated by the Hon'ble Gauhati High Court in Magus Construction Pvt. Ltd. v. Union of India - 2008 (11) S.T.R. 225 (Gau.), "Since the very concept of rendering of "service" implies two entities, one, who renders the "service", and the other, who is ....
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.... commands which enable the computer to perform a designated task. The copyright in that program may remain with the originator of the program. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a media, whether it be in the form of books or canvas (in case of painting) or computer discs or cassettes, and marketed would become "goods". The same would be applicable in the case of transfer of copyright of a T.V. serial in this case also, as it satisfies the criteria of goods as stated in Tata Consultancy Services (supra). 7. We find that payment of service tax and VAT are mutually exclusive. In a contract for supply of services there is no sale of goods If sale of goods are involved and VAT has been paid correctly; the activity would be outside the preview of Service Tax. There is no specific reference in the impugned order to the payment of VAT by the appellant. However, the appellant has submitted sample copies of two VAT returns for the period July & August 2009, to evince that, VAT has been paid to the government on sale of such copyright. Moreover, we find from para 7.5 of the OIO ....
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....d the programme on behalf of another person. The appellant produces the programme on its own and after the completion it may or may not be accepted by the channel / broadcasting agency. After production, they have transferred the copy right in the programme temporarily to the broadcasting agency. Such transfer of copy right does not attract levy of service tax under "TV or Radio Programme Production Service". A similar issue came up for analysis before the CESTAT Bench at Delhi and by Final Order No.58649/2017 dt. 14.12.2017 in the case of BBC World Services India Private Ltd. Vs CCE & ST Delhi the Tribunal observed that only when the programme is produced on behalf of another person, the said levy of service tax would be attracted. The relevant portion of the above Tribunal's order is reproduced below : ".....(g) On the second issue, the learned Counsel for the appellant submitted that they have produced various programmes without any reference to another person and thereafter whenever requirement arises gave such programmes to other domestic radio stations for broadcast. They received certain considerations for such transfer of programmes on temporary basis. These ar....