M/s. Prasad Corporation Ltd. @Hash Commissioner Of Service Tax

Brief facts of the case are that the appellant, M/s. Prasad Corporation Ltd., is engaged in data processing services such as Computer Graphics,

Digital Restoration and Reverse Telecine and they provide service to domestic as well as foreign customers. While the appellants paid Service Tax on

the service rendered to domestic customers, they did not pay Service Tax on the service rendered to foreign customers under the belief that it

amounted to export of services. The Revenue considered the above service rendered by the appellant as “Video Tape Production Service†and

issued periodical Show Cause Notices and confirmed the same. In the instant case, the demand of Rs. 45,77,295/ has been confirmed, for the period

from 01.04.2010 to 31.03.2011, vide impugned Order No. 451/2015 (STA-II) dated 31.12.2015 passed by the Commissioner of Service Tax (Appeals-

II), Chennai.

Learned Counsel for the appellant submits that the issue is no longer res integra being decided in appellants’ favour in their own case by this

very Bench in 2018 (11) G.S.T.L. 104 (Tri. â€" Chennai) and vide Final Order Nos. 43119 to 43121 of 2018 dated 17.12.2018. Tribunal held that the

services rendered by the appellants to foreign clients would not fall under the ambit of Video Tape Production Service. He further submits that while

appeal against CESTAT Final Order No. 42464 of 2017 dated 30.10.2017 is pending before the Hon’ble High Court of Madras, other appeal

against Final Order Nos. 43119 to 43121 of 2018 dated 17.12.2018 was dismissed on monetary limits and no stay however has been granted.

2.1 Learned Counsel for the appellant submits that the activities rendered by the appellant do not fall within the definition of Video Tape Production

Service at all; though the appellants have rendered services, in relation to recorded media, such as cutting, imparting special effects, processing, etc.,

they have not rendered any service for any programme, event or function and they are also not involved in any post-production activity. Learned

counsel further brings out the definitions of programme, event and function as follows:

“i. Programme: Â

The Concise English Oxford Dictionary, Tenth Edition defines the term ‘programme’ as “a planned series of events… a sheet or

booklet detailing items or performers at an event…â€​ Â

Volume II of 23rd Edition of Taxmann’s How to meet your Service Tax Obligations as released in August 2007 also refers to dictionary

meanings of the term ‘Programme’. The relevant portion is extracted hereunder: “The dictionary meaning of ‘programme’ is

a paper, booklet or like giving the outline of proceedings arranged for an entertainment, conference, course of study, etc. With relative

details, the items of such proceedings, collectively, a plan of things to be done, T.V. or radio presentation produced for broadcast single or

as one office series. In the present context the meaning ‘arranged for an entertainment, conference, course of study, etc., appears to be

more appropriate.â€​

ii. Event: Â

The Concise English Oxford Dictionary, Tenth Edition defines the term ‘event’ as “a thing that happens or takes place, a public or

social event…â€​ Â

Volume II of 23rd Edition of Taxmann’s How to meet your Service Tax Obligations as released in August 2007 also refers to dictionary

meanings of the term ‘event’. It specifies: “the word ‘event’ means anything which happens, result, any incident or

occurrence esp. a memorable one, contingency or possibility of occurrence, an item in a programme (of sports, etc.) … An organised

activity at a particular venue e.g. sales promotion, fund raising, etc.â€​

iii. Function: Â

The Concise English Oxford Dictionary, Tenth Edition defines the term ‘function’ as “a large or formal social event or

ceremony…â€​ Â

Volume II of 23rd Edition of Taxmann’s How to meet your Service Tax Obligations as released in August 2007 also refers to dictionary

meanings of the term ‘function’. It specifies: “the word ‘function’ means an impressive, elaborate or formal ceremony or

social gathering. The meaning formal ceremony or social gathering appears more appropriate in the present context.â€​

(Emphasis in original)

Per contra, Learned Authorized Representative for the Department reiterates the findings in the Order-inOriginal and Order-in-Appeal and submits

that though the appellant was not involved in the actual process of recording any programme in magnetic tapes, the appellant undertakes services of

restoration, giving special effects to inputs received via internet and tapes of old films; the definition of “Video Tape Production Service†includes

services such as cutting, colouring, imparting special effects, adding or undertaking any postproduction activity and therefore, Rule 3(ii) of the Export

of Service Rules would be applicable and therefore, the service is covered by Section 65(105)(zi) of the Finance Act, 1994.

Heard both sides and perused the records of the case. We find that the issue before us has been dealt by this Bench in their own case vide orders

cited supra. In 2018 (11) G.S.T.L. 104 (Tri. â€" Chennai), it was held as under:

“4. Heard both sides and have gone through the facts. It is clear that the services performed by the appellant definitely do not involve his

recording of any programme, event or function. In fact, this aspect has been considered even by the adjudicating authority in para 5.3 of

the order. The activities of services of Computer Graphics, Digital Restoration, and Reverse Telecine all involving activities on old feature

films is definitely a post-production film activity inter alia, rendered for service recipients abroad as per their requirements. This being so,

we are not able to fathom how the adjudicating authority, having stated that the appellants are not engaged in the recording of any

programme etc. has concluded that services or restoration, giving special effects etc. on the old films would be a “Video Tape

Productionâ€. Ostensibly, the department and the adjudicating authority have been influenced by the second limb of the definition of

“Video Tape Production†in Section 65(120) of the Act. The definitions have to be read in totality and part thereof cannot be picked up

to justify that the activities performed in the instant case will come under “Video Tape Production Servicesâ€. That would like putting the

cart before the horse. The statutory provisions relating to taxation have to be construed literally without engraving any additional meaning

thereto except in very rare cases where, the maxim of casus omissus would apply. This is certainly not one of those situations. The definition

of “Video Tape Production Serviceâ€​ is very clear and does not offer any ambiguity.

Viewed in this light, the services provided by the appellants will certainly not fall under the ambit of “Video Tape Production

Servicesâ€. The impugned order cannot then sustain and will have to be set aside, which we hereby do. Appeal is allowed with

consequential benefits, if any, as per law.â€​

We find that the ratio of the above judgement was followed in Final Order Nos. 43119 to 43121 of 2018 dated 17.12.2018. We find that no stay has

been granted by the Hon’ble High Court on the appeal filed by department. In view of the above, we find that nothing survives in the matter as we

do not find any reason not to follow the ratio of these cases.

In view of the above, the appeal is allowed along with consequential benefit, if any, as per law.

(Operative part of the order was pronounced in open court)