The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the copyright services that were related to the original artistic works done by the assessee are excluded from the payment of service tax.
South City Projects (Kolkata) Limited, the appellant assessee is registered under Service Tax for providing ‘Renting Of Immovable Property Service’, ‘Maintenance and Repair Service’, ‘Architect Service’, and ‘Club or Association Service’.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming Service Tax and Cess amounting to Rs. 91,23,642/- was confirmed along with interest and Rs. 79,68,379/- already paid by the assessee was appropriated against the confirmed demand and penalty was imposed under Section 76 of the Finance Act, 1994.
Saurabh Bagaria, the counsel for the assessee contended that out of the confirmed demand of Rs.11,55,263/- an amount of Rs.8,41,684/-are relatable to Copy Right Services, for which there was no demand in the show cause notice issued by the department.
Also submitted that the Copy Rights service rendered by the assessee are related to ‘Original Artistic Works’ which are excluded from payment of service tax.
J. Chattopadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that demand of service tax raised by the revenue was as per the law and liable to be sustained.
The Bench observed that there was no service tax demand on ‘Copy Right Service’ and defined under Section 65(za) of the Finance Act specifically excludes the right covered under sub-clause(a) of clause(1) of Section 13 of the Finance Act, which deals with copyrights related to ‘Original literary, dramatic, musical and artistic works’ and the Copy Rights service rendered by the assessee are related to ‘Original Artistic Works’ which are excluded from the payment of service tax.
The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand for service tax imposed on copyright services and also quashed the penalty imposed while allowing the appeal filed by the assessee.
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