By TIOL News Service

MUMBAI, OCT 26, 2016: THIS is a Revenue appeal.

The respondent had, against payment, downloaded images, journals, photographs etc. from the website of Agency France Press (AFP) which, according to tax authorities, was availment of 'online information and database access and/or retrieval service' with liability to pay tax of Rs.1,76,706/-.

The adjudicating authority held that it was taxable as 'intellectual property service' from which copyright is excluded for the purpose of taxation. Reiterating this contention, the revisionary authority, too, held in favour of the respondent and, therefore, the CST, Mumbai is before the CESTAT.

Revenue contends that copyright is not the issue in this subscription agreement but the right to use the downloaded images, and that it is the downloaded images that are commercially exploited and not the copyright per se. It is their contention that the subscription agreement enforces restrictions.

The respondent drew the attention of the Bench to the decision in M Palanimuthu - 2011-TIOL-1231-CESTAT-MAD wherein it is held that review of orders of Commissioner by the competent Committee of Chief Commissioners, under section 86 of Finance Act, 1994, did not extend to revision orders with effect from 19th August 2009 when section 86(2) of Finance Act, 1994 was amended and, therefore, the appeal filed pursuant to the said order is not valid in the eyes of law.

The AR submitted that the order which was sought to be reviewed had been passed on 6th July 2009 and taken up in revision proceedings within the time-limit prescribed in the erstwhile section 84 of Finance Act, 1994 and, therefore, even though section 86 did not, any longer, encompass revisionary orders, it was competent for the Committee of Chief Commissioners to review the impugned order and direct an appeal under section 86 of Finance Act, 1994.

Distinguishing the decision in TA Pai Management Institute - 2012-TIOL-911-CESTAT-BANG, the CESTAT observed -

"7. We find that the notice proposing revision was issued on 27th April 2011, well after the amendment that substituted the erstwhile section 84. Consequently, the circumstances that prevailed in re TA Pai Management Institute are not present in the instant dispute. The revision powers were sought to be invoked under a non-existent provision and hence the review undertaken by the Committee of Chief Commissioners is without jurisdiction."

The Revenue appeal was rejected.

(See 2016-TIOL-2780-CESTAT-MUM)