- (1.) THIS judgment will dispose of CWP Nos. 3094 and 5617 of 2005.
(2.) THE petitioners seek quashing of demand of service tax on the ground that service tax was not leviable on 'Multi System Operator' (MSO). Averments in CWP No. 3094 of 2005 may be first noticed. Respondent No. 3 is Multi System Operator providing TV signal to the petitioner and other cable operators, who in turn provide cable services to residents. Service tax is leviable under the provisions of the Finance Act, 1994 (Act 32 of 1994) as amended by Finance Act, 2002 w.e.f 16 -8 -2002. Respondent No. 3 informed the petitioner that with effect from 10 -9 -2004, Central Excise Department has claimed service tax as per communication dated 18 -2 -2005. Letter of respondent No. 3, Annexure P. 2 is reproduced below: As a Multi System Operator, we are providing signal to you and as a consequence thereof you have been rendering your cable operator business in the area of Sectors -11, 12, 12 -A and 14, Panchkula. As per the earlier circular/notification, only the cable operator providing services to the consumers were liable to pay the service tax, which you have been paying, as brought to our notice. However, now the Central Excise Department is claiming that w.e.f. 10 -9 -2004, Multi System Operator is also liable to pay the service tax in relation to the cable services in his capacity as a Multi System Operator. We are enclosing herewith for your information the communication in this regard dated 18 -2 -2005 of the service tax department. In light of the above, we hereby intimate that service tax @ 10.2% would be charged upon you on the bills raised by us for providing TV signals. You are called upon to deposit the due service tax on or before 21 -2 -2005. You are requested to make the arrangements for payment thereof. This intimation is being sent to you in light of the communication issued by the Service Tax Department dated 18 -2 -2005. Letter dated 18 -2 -2005 of the Excise department is as under: It has been found that you have not deposited service tax w.e.f. 10 -9 -2004 in respect of cable services rendered to the cable operators as an MSO. The service tax is required to be paid @ 10% plus Education Cess @ 2% on the amount collected from your clients i.e. cable operators. In addition to this you are also required to pay service tax on advertisement service w.e.f. 16 -7 -2001 under the category of broadcasting services.
(3.) IN CWP No. 5617 of 2005, identical averments have been made except that the petitioners themselves are Multi System Operators.;