Case Law Details
Commissioner of Service Tax Vs One Entertainment Network Pvt. Ltd. (CESTAT Mumbai)
The respondents are, or have been, ‘surrogate’ providers of `broadcasting’ service in India, taxable under section 65(105)(zk) of Finance Act, 1994 since 2001 (and, more especially, with retrospective effect of the amendment incorporated in 2002), in the hands of `broadcasting agency’ as defined in section 65(16) of Finance Act, 1994. The case of service tax authorities against these ‘broadcasting agencies’, representing ‘broadcasters’ outside the country, who, as per regulatory framework, are to act as surrogates and not for taxing purpose alone, is that, in addition to liability to be taxed on the consideration received for offering time slots, sponsorship of channel programmes and from the downstream carriers of broadcast/telecast signals which, admittedly, has been discharged , ‘commission’ for such handling contractually retained before remitting the dues, received as surrogate, to the overseas entity is also liable to tax as consideration for having rendered ‘business auxiliary service (BAS)’, defined in section 65(19) of Finance Act, 1994, under section 65(105)(zzb) of Finance Act, 1994.
For Revenue, it was argued that retained amount constitute consideration for acting as an intermediary for securing the earnings that are generated from telecast of signals and, according to Learned Authorised Representative, a domestic provider of the same `broadcasting’ having to utilize the services of an agent for the same collection would have to bear the burden of tax on the consideration paid to such agent requiring the overseas provider to be subject to the same burden.
The deeming fiction carries with it the burden of tax on the entire consideration receivable by the overseas entity and in the hands of the Indian entity acting as agency of such overseas entity. Respondent is deemed provider of service and the range of activities included in the taxable service comprises the very aspects that were sought to be taxed in the proceedings initiated by the show cause notices. Perceptibly, the same activity cannot be taxed twice as the classification of services itself provides, by section 66F of Finance Act, 1994, for situation in which more than one competing entry cannot be allowed to sustain.
In Union of India & Anr. v. Deoki Nandan Aggarwal, AIR 1992 SC 96, this Court observed that “It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legislature when the language of the provision is plain and unambiguous. The Court cannot rewrite, recast or reframe the legislation for the very good reason that it has no power to legislate. The power to legislate has not been conferred on the Court.”
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