By TIOL News Service

CHENNAI, APR 10, 2015 : THIS is a revenue appeal against the order of CESTAT reported in 2008-TIOL-2127-CESTAT-MAD. The Tribunal vide the above order held as under:

Broadcasting Service - selling of time slots to various sponsors, selecting, producing and scheduling programmes for telecast by the Broadcasting Company and obtaining sponsorship from clients is taxable under Broadcasting Service - Section 65(14) and 65(15) of the Finance Act, 1994.

Limitation - the fact that the appellant was providing the taxable service was within the knowledge of the department - extended period is not invokable - demand has to be re-quantified for the normal period and penalties imposed under Section 76, 77 and 78 set aside as the issue involved predominantly a question of interpretation.

It is the contention of the Revenue that the Tribunal erred in setting aside the demand of service tax for the extended period of limitation, as the department had no knowledge about the Slot Sale Agreement between the assessee and Vijay TV.

After hearing both sides, the High Court held:

The original adjudication order, as has been observed by the Tribunal, merely states that "suppression of facts and willful intent to evade payment of Service Tax and Education Cess by VTPL are well established. Therefore, the Service Tax and Education Cess are liable to be demanded under proviso to Section 73(1) of the Finance Act". There is no discussion on suppression of fact and wilful intent to evade payment of service tax. This finding is bald and bereft of reasons.

On fact, the Tribunal has gone into the Slot Sale Agreement dated 1.8.2001 and based on the plea taken by the respondent, the Tribunal came to the conclusion that there was material before the department to show that they were in the know of activities undertaken by the respondent. In the order of the Tribunal there is a finding on fact that there is no suppression of material facts by the respondent before the department. There is also a finding that the provisions of the Slot Sale Agreement between the respondent and the broadcasting company were within the knowledge of the department and, therefore, the department could have proceeded for levy of service tax on the premise that the nature of activity rendered by the respondent/assessee is a taxable service.

The question of law that has been proposed by the department is on the very face of it not a question of law, but a question of fact. To answer that question necessarily one has to delve into the facts and find out whether such material was available or not. The finding of the Tribunal, which is the final fact finding authority, cannot be overturned merely based on a plea made in the appeal by the department.

Accordingly, the High Court dismissed the appeal filed by the revenue.

(See 2015-TIOL-874-HC-MAD-ST)