Services constituting post-production digital processing do not fall under Video Tape Production Services; thus, qualify as export under relevant tax rules.

Per Mr. VASA SESHAGIRI RAO

These Appeals ST/42295 to 42298/2015 (Sl. Nos 1 to 4 of the Table given below) and ST/41777/2018 (Sl. No 5 of the Table) have been filed by M/s. Prasad Corporation Ltd. Chennai (hereinafter referred to as ‘the Appellant’) against the Order-in-Original Nos. 16 to 19/2015-16 dated 14.08.2015 and Order-in-Original No. 08/2018 dated 27.02.2018 passed by the Commissioner of Central Tax / Service Tax, Chennai (‘impugned order’ for short) , whereby service tax demands were confirmed against the Appellant along with levy of interest and imposition of penalties under the provisions of the Finance Act, 1994 , as tabulated below: -

2.1 The Appellant, is registered under the Service Tax for Photography Services, Management, Maintenance & Repair Services and Information Technology Services. The Appellant is engaged in specialised post-production film activities such as Computer Graphics, Digital Restoration and Reverse Telecine, which involve manipulation and processing of digitised image data received from customers.

2.2 The Appellant provides these services both to domestic customers and customers located outside India. Service tax was discharged on services rendered to domestic customers. In respect of services rendered to foreign customers, the Appellant did not discharge service tax on the ground that such transactions constituted export of services.

2.3 For the period 01.04.2011 to 30.06.2017, various Statements of Demand / Show Cause Notices were issued proposing to demand service tax, interest and penalties, primarily on the allegations that: -

i. the services are classifiable as Video Tape Production Services (for the pre-negative list period);

ii. the services do not qualify as export under the Export of Services Rules, 2005 (pre-01.07.2012);

iii. post-01.07.2012, the place of provision of service is in India under Rule 4 of the Place of Provision of Services Rules, 2012; and,

iv. Consequently, all conditions of Rule 6A of the Service Tax Rules, 1994 are not satisfied.

2.4 The demands were confirmed vide Order-in- Original No. 16 to 19/2015-16 dated 14.08.2015 and Order- in-Original No. 08/2018 dated 27.02.2018, leading to the present appeals. As the issues involved are identical, all these appeals are being taken up together for disposal by this common order.

3. The Ld. Advocate Mr. Raghavan Ramabadran, appeared on behalf of the Appellant and advanced detailed submissions in support of the Appellant Assessee and the Ld. Authorized Representative Mr. Sanjay Kakkar, appeared for the Revenue and capably defended the Impugned Orders.

4. The contentions / submission of the Ld. Advocate Mr. Raghavan Ramabadran are summarized as follows: -

4.1 That for the period prior to 01.07.2012, the impugned demands proceeded on the erroneous assumption that the Appellant’s activities are classifiable under “Video Tape Production Services” as defined under Section 65 (120) read with (105)(zi) of the Finance Act, 1994 .

4.2 That the statutory definition mandates recording of a programme, event or function. The Appellant admittedly does not record any programme, event or function. Its activities are confined to post-production processing of already recorded digital image data, without any audio component. Consequently, the essential ingredients of the taxable service are absent.

4.3 That this issue stands conclusively settled in favour of the Appellant by a series of decisions of Chennai Tribunal in the Appellant’s own case, namely: -

i. Prasad Corporation Ltd. v. CST, Chennai – 2018 (11) GSTL 104 (Tri.-Chennai)

ii. Prasad Corporation Ltd. v. CGST & CEx., Chennai – 2019 (1) TMI 506

iii. Prasad Corporation Ltd. v. CST – 2021 (1) TMI 384

Revenue appeals against the said orders were either dismissed or w