dscn-arora cable (half year)

8/15/2019 DSCN-Arora Cable (Half Year)

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OFFICE OF THE PRINCIPAL COMMISSIONER

CENTRAL EXCISE & SERVICE TAX COMMISSIONERATE,

F-BLOCK, RISHI NAGAR,

LUDHIANAC. No.-V(ST)ADC/Ldh/17/2016 Dated:

SHOW CAUSE NOTICE

M/s Arora Ca!" TV, # Ra$a Co$%!", '() F!oor, O!) Sa*+ Ma()+ Mar", Mo.a (here-in-

after referred to as ‘the Noticee’) are registered with the Service Tax Department vide Service Tax

Registration No. AANA!"#"SD$$% dated %&.'.'%' *nder Section !# of the inance Act+ %##&

(hereinafter referred to as the Act) and have fi,ed ST-" ret*rns for the ha,f ear ending Sep-'%& on%.%'.'%& and were engaged in providing taxa,e services *nder the categor of /a,e $perators as

defined in Section !0 (&&) of the Act in the specified territoria, area for providing the taxa,e services

as m*t*a,, agreed *pon the Noticee and 12s astwas Transmission Services (3) 4td.+ 4a55a Tower Near 3.. 0*i,ding+ Sham Nagar+ 4*dhiana (hereinafter referred to as astwa).

. 12s. astwa are operating as 1*,ti Sstem $perator (1S$) who receive T6 contents from T6/hanne,s2aggregators and s*pp, those to ,in7ed ca,e operators (4/$s). 12s. astwa have entered

into an agreement with the Noticee for s*pp, of T6 contents against monetar consideration paa,e

the Noticee. As per the agreement entered into 12s. astwa+ the Noticee is transmitting the signa,sreceived from 12s. astwa as it is witho*t an addition2modification. The name2,ogo of astwa is

contin*o*s, disp,aed d*ring the transmission and reception of T6 programme *,timate cons*mers

and it appears that the Noticee *ndertoo7 the distri*tion of services provided a person *nder a rand

name or trade name+ whether registered or not+ of another person.

". *rther+ as per provisions of Section !(%')(8s)(va,id *pto "'.'!.'%) of the Act+ and *nder

Section !!0 of the Act+ (va,id w.e.f. '%.'9.'%)+ an service provided or to e provided to an person

a ca,e operator in re,ation to ca,e services is taxa,e service and s*5ect to service tax. As per provisions of Section !9 of the Act+ service tax chargea,e on an taxa,e service with reference to its

va,*e+ sha,, e the gross amo*nt charged the service provider for s*ch service provided or to e provided him. :owever+ Notification No.!2''-ST dated '%.'".'' (as amended) (va,id *pto

"'.'!.'%) and 2or ""2'% ;ST dated '.'!.'% (va,id w.e.f.'%.'9.'%) exempts taxa,e services of

a specified aggregate va,*e in an financia, ear from who,e of the service tax ,evia,e thereon

:owever+ it has een specifica,, provided in the notification that nothing contained in this notificationsha,, app, to+ taxa,e services provided a person *nder a rand name or trade name+ whether

registered or not+ of another person. The rand name has een defined in the aove mentioned

notifications as<

“(A) “ brand name” or “trade name” means a brand name or a trade name, whether registered or not,that is to say, a name or a mark, such as symbol, monogram, logo, label, signature, or invented word orwriting which is used in relation to such specified services for the purpose of indicating , or so as to

indicate a connection in the course of trade between such specified services and some person using such

name or mark with or without any indication of the identity of that person.”

&. As the service eing provided the Noticee is *nder the trade name 2 trade mar72 ,ogo of other

person (i.e. astwa)+ as disc*ssed s*pra+ the enefit of va,*e ased exemption as provided *nder

Notification No.!2''-ST dated '%.'".'' (as amended) does not appear to e admissi,e and itappears that the Noticee sho*,d have discharged the service tax ,iai,it on the gross amo*nt received

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from the c*stomers2*sers2cons*mers to whom the Noticee is providing the service. :owever+ it has eenoserved that the Noticee has neither otained the service tax registration from the department d*ring

the said period nor have discharged the service tax ,iai,it on the gross amo*nt so received from the

c*stomers.

. According,+ the Noticee vide ,etter /.No. ST-'21isc24/$21oga2'%2'%2"!& dated

".'".'% and "9 dated '%.'&.'% was re=*ested to provide the detai,s of the amo*nt charged fromeach s*scrier and the detai,s of service tax pament+ if an d*ring the financia, ears ''#-%'+ '%'-

%%+ '%%-%+ '%-%" and '%"-%&. The Noticee did not respond to the departmenta, comm*nication.

! :owever+ :=rs. 3reventive+ /entra, >xcise /ommissionerate+ 4*dhiana provided the detai,s of

4/$s ased in the 5*risdiction of Range $ffice+ 1oga as received from astwa indicating the name+

address and contact n*mer of the person concerned and the copies of ,edger acco*nt of 4/$s

associated with them and samp,e copies of the agreements exec*ted with the 4/$s for the period ''#-%' to '%"-%&.

9. *rther to see7 some c,arifications+ the statement of Shri Ra5esh 1ehr* S2o Shri Dharam /hand1ehr*+ resident of :.No+ 9"+ 1ode, ?ram+ 4*dhiana+ a*thori8ed signator of astwa+ was recorded

on '#.%'.'%& *nder Section %& of the /entra, >xcise Act as made app,ica,e to the Service Tax as perthe provisions enshrined in Section @" of the inance Act+ %##&. Shri Ra5esh 1ehr*+ the a*thori8ed/hartered Acco*ntant of astwa in his statement+ intera,ia+ stated that he was wor7ing since ''# with

astwa and was entr*sted the wor7 of s*pervising+ maintenance and fina,i8ation of inancia, Acco*nts

of the aove said compan that he a,so s*pervise the fi,ing of stat*tor ret*rns with vario*s

?overnment Departments inc,*ding service tax department that astwa is engaged in providing theTe,evision Signa,s oth Digita, and Ana,og*e and wor7ing as 1S$ that the provide signa,s to 4/$

who in t*rn provide the signa,s to the ,ast mi,e s*scrier that from the ear ''#-%' (Apri, +''#) to

'%%-% (Bpto 1arch+ '%) on, Ana,og*e Sstem was in operation that in the ana,og*e sstem ,*mp-s*m i,, was raised to the 4/$ as per the data regarding n*mer of connections (s*scriers) provided

the 4/$ as there was no Digita, Access Sstem that the i,,ing was C Rs.%''2- per connection

d*ring the said period that the share of 4/$ and 1S$ was *s*a,, on ' share asis (Rs.%''2- each)that from Apri,+ '% after onset of Digita,i8ation + the compan *sed to raise the i,, on the asis of

ST0 insta,,ed in the territor of each 4/$ C Rs.%''2- per ST0 o*t of which Rs.!2- eing the

s*scription amo*nt and Rs."2- as digita, rent of ST0 that Rs.%''2- was the gross amo*nt of i,,ing

which was inc,*sive of service tax as we,,

@. Sh. ?*rdeep Singh S2o S. Easwant Singh+ Resident of :o*se No. 9-0+ Ra5g*r* Nagar+ 4*dhiana

1anaging Director of 12s astwa Transmissions 3vt. 4td.+ 4a55a Tower+ Near >.3.. 0*i,ding+ Sham Nagar+ 4*dhiana in his statement recorded on @.'.'% inter alia stated that<

i. 12s astwa Transmissions 3vt. 4td.+ 4*dhiana had five directors name, S2Sh. ?*rdeep Singh

(himse,f)+ Arshdeep Singh (his son)+ 6isha, /ha*dhar+ Eag5it Singh Foh,i and Gogesh Shah andthat the compan was incorporated on %%.%'.''9

ii. the compan was wor7ing as an 1S$ (1*,ti Sstem $perator) and were registered with theService Tax department vide Registration No. AA0/%@&0ST''%

iii. 1S$ was an intermediar etween roadcasting companies and 4/$s+ and received the T6

contents from roadcasters and re-transmitted the same to 4/$s for s*ch re-transmission

p*rpose the had insta,,ed head-end and transponders at their premises at 4a55a Tower4*dhiana and that from there the distri*ted the signa,s to 4/$s thro*gh optic fire ca,e

networ7 ,aid thro*gho*t 3*n5a+ /handigarh and some parts of :arana and :imacha, 3radesh

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iv. the 4/$s distri*ted the signa,s received from the 1S$s to each and ever s*scrier of theirnetwor7 thro*gh their own ca,e networ7

v. efore the digita,i8ation (of ca,e services)+ i.e. prior to "%.'".'%+ ana,og*e sstem was in

operation *nder which ana,og*e signa,s were provided to 4/$s+ and 1S$ *sed to raise the i,,son 4/$s at ,*mp s*m asis on the dec,aration of 4/$s regarding the n*mer of

connection2s*scriers

vi. the share of 1S$ (12s astwa Transmissions 3vt. 4td.+ 4*dhiana) and its 4/$s in thes*scription (amo*nt received from *,timate cons*mers of ca,e service) d*ring ana,og*e period

was ao*t '


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xvii. their 4/$s were ,ocated in 3*n5a+ /handigarh and parts of :imacha, 3radesh and :arana thatthe were 7eeping data as per ranch networ7 maintained them s*ch as 4*dhiana+ Amritsar

Ea,andhar+ /handigarh+ 0athinda+ 3atia,a+ Shim,a and Ama,a

xviii. ranch-wise soft cop of ,ist of 4/$s a,ong with the amo*nt co,,ected from these 4/$s (areawise) had een s*pp,ied to 4*dhiana /ommissionerate and hard cop of the same wo*,d e

signed a*thori8ed representative of the compan+ i.e. Sh. Ra5esh 1ehr* in to7en of its

correctness.xix $n f*rther eing as7ed ao*t the ,ogo2rand name of the compan and whether the ,ogo2rand

name remained disp,aed on T6 screens of s*scriers d*ring transmission of contents s*pp,ied

their compan to 4/$+ he stated that the ,ogo2rand name of their compan was JHK whichremained contin*o*s, disp,aed on T6 screens of s*scriers d*ring the transmission of

contents s*pp,ied them to 4/$ and f*rther to s*scriers

# A Show /a*se Notice was iss*ed to the noticee for the period Apr-'%' to 1ar-'%& vide /.No6(ST)E/24dh2%""2'%29"% dated %9.'!.'% for recover of Service Tax of Rs. &'+!+"&"2- on the

asis of est 5*dgment assessment as provided *nder Section 9 of the Act the Eoint /ommissioner

/entra, >xcise /ommissionerate+ 0,oc7+ Rishi Nagar+ 4*dhiana.

%'. or the s*se=*ent period '%&-%+ the E*risdictiona, Range $ffice vide ,etter dated %&.%'.'%re=*ested the Noticee to provide the amo*nt charged them from the c*stomers on acco*nt of services provided them and Service Tax paid+ if an+ for the period '%&-% and the Noticee vide their ,etter

dated "'.%'.'% intimated that the have co,,ected an amo*nt of Rs. 99+&"+"##2- and paid Service Tax

of Rs. #+9+'@2- for the financia, ear '%&-%. rom the ST-" ret*rn fi,ed the part for the period

Apri, to Septemer '%& it has een ascertained that the Noticee has paid Rs. "+9'+'&2- (34A L/envat)on taxa,e Services of Rs. #+#"+@@@.

%% In the meanwhi,e the E*risdictiona, Range office vide ,etter /.No. ST-'21isc24/$21oga2'%2'%2&&@ dated '@.%.'% and ! dated '%.'%.'%! a,so re=*ested the astwa to provide

the detai,s of the amo*nt raised astwa to the 4/$ and the amo*nt retained the 4/$ d*ring the

period '%&-%. The astwa vide their e-mai, dated '!.'%.'%! provided the copies of Noticee’s ,edgeracco*nt for the period '%&-%. *rther+ Range $ffice vide ,etter of even No. dated %".'%.'%!

re=*ested astwa to c,arif as to whether the amo*nt mentioned is the amo*nt paid to astwa or the

amo*nt retained the 4/$. astwa vide their ,etter dated %%.'.'%! c,arified that the soft data

regarding 4/$ mai,ed to Range $ffice on '!.'%.'%! shows the amo*nt of i,,ing raised astwa to4/$’s d*ring the period *nder consideration and has the fo,,owing fig*res.

(a) 6a,*e means va,*e of services provided to 4/$.() Service Tax means Service Tax on Service provided.

(c) ?ross Tota, means tota, of oth (aL) i.e. va,*e of service provided p,*s service tax.

4/$ co,,ect the gross amo*nt of i,, raised astwa from end cons*mer.

4/$ retained his share and the a,ance paid to astwa.

rom the aove+ it appears that 1S$ i.e. astwa is on, i,,ing the amo*nt pertaining to service provided to 4/$ on,+ however the 4/$ co,,ects the gross amo*nt from the end cons*mer and after

retaining his share+ pas the a,ance amo*nt to astwa as i,,ed them.

%. Scr*tin of the data received from astwa revea,s that the amo*nt for which i,,s have een

raised on the Noticee for the period Apri, to Septemer '%& is as *nder


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Sr.

No.

3eriod Amo*nt for which the pament made the Noticee to astwa

% '%&-% (BptoSep-'%&)

@+&%+!''2-

%". $n scr*tin of ST-" Ret*rn (Apri,-Sept '%&) fi,ed the Noticee+ it appears that the noticee in

their ST-" ret*rn dec,ared the va,*e of taxa,e services as Rs. #+#"+@@@2- and paid Service Tax of Rs.%@+@"2- in cash and Rs. "+%+2- from /envat credit (Tota, Service Tax shown as paid in ST-" Ret*rn

- Rs. "+9'+'&2-). The Noticee was not entit,ed for /envat /redit of Service Tax paid to astwa as theamo*nt i.e Rs. #+#"+@@@ on which Service Tax has een ca,c*,ated the noticee appears to e the

amo*nt retained them and the amo*nt charged astwa i.e. Rs. @+&%+!''2- was not inc,*ded for

ca,c*,ating their Service Tax ,aii,it. The noticee were entit,ed for /envat credit on,+ had the ServiceTax paa,e them een ca,c*,ated on the amo*nt co,,ected from the *,timate s*scier i.e. the

amo*nt charged astwa from the Noticee p,*s the amo*nt retained the Noticee. :owever+ the

have avai,ed />N6AT credit of Rs. "+%+2- i.e the Service Tax charged astwa on the amo*ntcharged from them. Since+ the Noticee have not assessed their Service Tax ,iai,it correct,+ service tax

,iai,it is to e wor7ed o*t+ in terms of the provisions of Section 9 of the Act as was done in the

previo*s S/N iss*ed to the Noticee ta7ing the amo*nt paid the Noticee to the astwa as &' ofthe amo*nt received the Noticee for provision of the taxa,e services. According,+ the detai,s ofservice tax ,iai,it in respect of the Noticee are as *nder.3.. 0*i,ding+ Sham Nagar+ 4*dhiana recorded on @.'.'% app,ing the &'2!' ratio. Service Tax of Rs. +'@+'%'2-

appears to e recovera,e from the Noticee *nder Section 9" of the Act.

%&. *rther+ the Noticee were re=*ested vide range office ,etter #.'".'%! to provide copies of

invoices on the asis of which /envat /redit was avai,ed the noticee in financia, ear '%&-%. Theco*nse, of the noticee s*mitted copies of Invoices for the month of Apr-'%& and 1a '%& on, *t

fai,ed to f*rnish the invoices for the remaining %' months of the financia, ear '%&-%. As per invoicesfor the month of Apri, and 1a+ '%&+ /envat /redit of Rs. %+%9+'9&2- was admissi,e to the noticee as

per R*,e #(i)(f) of the /envat /redit R*,es ''&+ as the notice was enti,t,ed for the /envat /redit on,

on the asis of an invoice+ a i,, or cha,,an iss*ed a provider of Inp*t Service i.e 12s astwa. The0a,ance amo*nt of /envat /redit of Rs. +"&+%&@2- avai,ed and *ti,i8ed the noticee appears to e not

admissi,e to them as no s*pporting doc*ments have een provided to the Range $ffice and appears to

e recovera,e from the Noticee *nder R*,e %& of the /envat /redit R*,es+ ''&. :ence+ it appears that

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/envat /redit of Rs. +"&+%&@2- has een avai,ed and *ti,i8ed the noticee reason of fra*d+co,,*sion+ wi,,f*, mis-statement or s*ppression facts with an intent to evade pament of Service Tax.

% rom the aove+ it appears that the Noticee have fai,ed to pa service tax amo*nting to Rs+'@+'%'2- for providing the said taxa,e services *nder a rand name+ whether registered or not+ of

another person to vario*s *sers in contravention of the provisions of Sections !@ of the Act read with

R*,e ! of the Service Tax R*,es+ %##& which appears to e recovera,e from them *nder Section 9" ofthe inance Act+ %##&. The /envat /redit of Rs. +"&+%&@2- avai,ed and *ti,i8ed the noticee a,so

appears to e recovera,e from the Noticee *nder R*,e %& of the /envat /redit R*,es+ ''&. $n the said

Service Tax and wrong, avai,ed2*ti,i8ed /envat credit+ interest a,so appears to e recovera,e from the Noticee *nder Section 9 of the Act. The Noticee a,so appears to e ,ia,e for pena, action *nder Section

9@ of the Act as the Noticee in the ST-" ret*rns fi,ed them 2 fig*res s*pp,ied them+ appears to have

s*ppressed the va,*e of Taxa,e Services provided them and have not provided the correct amo*nt

co,,ected from the s*scriers. The noticee wi,,f*,, s*ppressed the va,*e of taxa,e services notadding the amo*nt charged astwa to the amo*nt retained the Noticee with an intent to evade

pament of Service Tax. The Noticee a,so appears to e ,ia,e to pena, action *nder Section-99 for non

s*pp,ing of the invoices ased on which /envat /redit has een avai,ed them. *rther+ the noticeea,so appears to e ,ia,e to pena, action *nder R*,e %(") of the />N6AT /redit R*,es+ ''&.

%!. Th*s+ it appeared that the Noticee have contravened the provisions of<

(i) Section 9 of the Act in as-m*ch-as the have fai,ed to assess the correct va,*e of Taxa,e

services provided them+ as exp,ained in foregoing paras for the period Apr-'%& to Sep-'%&

(ii) Section !@ of the Act read with R*,e ! of the Service Tax R*,es+ %##& in as-m*ch-as the havefai,ed to pa Service Tax amo*nting to Rs. +'@+'%'2- as exp,ained in foregoing paras for the period Apr

'%& to Sep-'%&+ as ca,c*,ated in the manner mentioned at para-%" aove to the credit of the

?overnment within the stip*,ated time ,imit(iii) R*,e # of the /envat /redit R*,es ''&+ in as m*ch as the appears to have wrong, avai,ed

/envat /redit of Rs. +"&+%&@ as mentioned in 3ara %& aove.

Th*s+ the noticee have rendered themse,ves ,ia,e to pena, action *nder Section-99 and Section-

9@ of the Act and R*,e-%(") of the /envat /redit R*,es+ ''& for contravention of the provisions

referred s*pra.

%9. Now+ therefore+ M/s Arora Ca!" TV , # Ra$a Co$%!" '() F!oor, O!) Sa*+ Ma()+ Mar",Mo.a are here ca,,ed *pon to show ca*se to 0" A))++o(a! Co$$+ss+o("r, C"(ra! E2+s"

Co$$+ss+o("ra", F-B!o2, R+s0+ Na.ar, L8)0+a(a within "' das of receipt of this notice+ as towh <

7+; The provisions of Section 9 of the inance Act+ %##& sho*,d not e invo7ed to assess the

taxa,e va,*e and Service Tax paa,e the noticee7++; Service tax amo*nting to Rs5 9,3) sho*,d not e recovered from them *nder Section 9" of the inance Act+ %##&.

7+++; /envat /redit of Rs5 ',?6,46 Fo8r T0o8sa() O(" H8()r") &

For> E+.0 o(!>) sho*,d not e recovered from them *nder R*,e %& of the /envat /redit

R*,es ''& read with Section 9" of the Act.

7+=; Interest on the Service Tax and /envat /redit recovera,e sho*,d not e recovered fromthem *nder Section 9 of the inance Act+ %##&.

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7=; 3ena,t sho*,d not e imposed *pon them *nder Section 9@ of the inance Act+ %##& fors*ppressing the va,*e of taxa,e services with intent to evade pament of Service Tax

7=+; 3ena,t sho*,d not e imposed *pon them *nder R*,e %(") of the /envat /redit R*,es

''& read with Section 9@ of the Act.

7=++; 3ena,t sho*,d not e imposed *pon them *nder section 99 of the inance Act+ %##& for

contravention of the provisions exp,ained s*pra.

%@. The Noticee are f*rther re=*ired to prod*ce at the time of showing ca*se a,, the evidence

doc*mentar or otherwise *pon which the intend to re, in s*pport of their defence. The sho*,d a,so

mention in their written exp,anation whether the wish to e heard in person or thro*gh their a*thori8edrepresentative2co*nse, efore the ad5*dication of the case. If no mention is made ao*t this in their

written exp,anation+ it sha,, e pres*med that the do not desire a persona, hearing in this case.

%#. The Noticee sho*,d a,so note that if no ca*se is shown against the action proposed to e ta7enagainst them within the stip*,ated period of "' das or if the Noticee or their a*thori8ed

representative2co*nse, do not appear efore the ad5*dicating a*thorit on the date and time fixed for

persona, hearing witho*t s*fficient ca*se eing shown+ the case wo*,d e decided ex-parte on the asisof evidence a,read on record witho*t an f*rther reference to them.

'. This show ca*se notice is iss*ed witho*t pre5*dice to an f*rther action that ma e ta7enagainst the Noticee either in the case or an other case *nder the provisions of inance Act+ %##& and the

Service Tax R*,es made there *nder+ or an other Act or 4aw for the time eing in force in India.

A))++o(a! Co$$+ss+o("r

T0ro8.0 D+=+s+o( O11+2"@-

M/s Arora Ca!" T=# Ra$a Co$%!", '() F!oor,

O!) Sa*+ Ma()+ Mar", Mo.a5

Co%> o@-

%. The Assistant /ommissioner+ /entra, >xcise M Service Tax+ Division+ 1oga a,ongwith copmeant for noticee. It is re=*ested that S/N ma p,ease e got de,ivered a,ongwith Annex*re(s)

and RBD(s) *nder proper receipt. Receipt so otained ma p,ease e sent to this office for

record..

. The S*perintendent+ /entra, >xcise M Service Tax Range+ 1oga

S*perintendent (Ad5.)

Additiona, /ommissioner /ompetenc

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