AMRITA ENTERPRISES PVT. LTD. Vs. C.C.E.

JUDGEMENT

(1.) APPLICANT has filed this application for waiver of pre -deposit of Service Tax of Rs. 1,72,82,962/ -, interest and penalty. The demand of Rs. 95,11,529/ - is confirmed on the ground that the applicant has availed credit and used in excess of 20% as the applicant is providing both taxable as well as exempted service.

(2.) THE applicant is mainly contesting the demands of Rs. 95,11,529/ -, Rs. 56,40,348/ - and Rs. 15,81,388/ - : In respect of the demand of Rs. 95,11,529/ -, the contention of the applicant is that as per the adjudicating authority, the applicant has transferred copyright in respect of films to their customers. The contention is that the adjudicating authority has held that transfer of copyright is exempted from taxable service. Hence, the applicants are not entitled for taking credit in excess of 20% under the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004. The contention is that as per Section 65(55b) of the Finance Act, 1994, "Intellectual Property Service" means -

(3.) IN respect of the demand of Rs. 56,40,348/ -, the contention of applicant is that as the service recipient is outside India who has paid the consideration in the convertible foreign exchange. As the service recipient is outside India, therefore such service cannot be treated as 'export of service'. The demand is on the ground that advertisements were broadcasted ultimately in India and that as broadcasting is performed in India and therefore, it cannot be treated as 'export of service'. The applicant relied upon Board's Circular No. 111/05/2009 -S.T., dated 28 -2 -2009 wherein it has been clarified that for the services that fall under the Category III [Rule 3(1)(iii)], the relevant factor is the location of the service receiver and not the place of performance. The applicant also relied upon the decision of the Tribunal in the case of Paul Merchants Ltd. v. Commissioner of C. Ex., Chandigarh [ : 2013 (29) S.T.R. 257 (Tri. -Del.)]. In view of this, the contention is that as the service recipient is outside India and therefore, the demand is not sustainable.