B. Ravichandran ORDER
B. Ravichandran, Member (T)
1. This appeal by the Revenue is against the order dated 18.03.2011 of Commissioner (Adj.) Service Tax, New Delhi.
2. The brief facts of the case are that the respondents were registered with the Department for various taxable services. They 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 case was adjudicated and vide impugned order, the ld. Commissioner dropped the proceedings initiated vide show cause notice dated 28.04.2008. Aggrieved by this order, Revenue is in appeal.
4. In the grounds of appeal, the main contention of the Revenue is that the respondent was only acting as a representative or agent of foreign broadcasters for promoting, selling and distributing their channels in India. Broadcasting and distribution of channels inevitably included selling, advertisements, spots and getting sponsorship. It was contended in the appeal that the respondents are not covered by Board's letters dated 26.09.2005 and 9.6.2006. The Board's Circulars were with reference to the services provided by MSO which became chargeable to service tax w.e.f. 16.06.2005. The respondents were not acting as an MSO and hence, the Commissioner erred in dropping the demand.
5. We have heard both the sides and perused the appeal records.
6. Ld. AR mainly reiterated the points in the grounds of appeal.
7. Ld. Counsel for the respondent submitted that the ld. Commissioner (Appeals) examined the nature of services rendered by the respondents, allegations in the show cause notice and the scope of amendment carried out in the term Broadcasting and Broadcasting Agency or Organization w.e.f. 16.06.2005 and came to the conclusion that there is no additional service tax liability on the respondent. Ld. Counsel further submitted that the Board's letter dated 26.09.2005 to DG Service Tax is very clear. In the appeal by Revenue, there appears to be a mis-appreciation of the facts to the effect that the respondent's 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 reproduced below:--
"3.3.1 The legal position that the service tax was chargeable on amount collected by broadcasting agencies or organizations or their agents from multisystem operations and cable operators only with effect from 16.06.2005, has further been clarified by Central Board of Excise & Customs under their letters issued from F. No. 345/5/2005-TRU dated 26th September, 2005 and F. No. 149/5/2006-CX.4 dated 9th June, 2006.
3.3.2 The letter dated 26th September, 2005 was addressed to Director General (Service Tax), Mumbai and has been signed by Joint Secretary (TRU II). The letter dealt with the issue of charging service tax on amount collected from MSOs and cable TV operators by broadcasters for sellin........