2026-VIL-82-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax – Rule 6A of Service Tax Rules, 1994 – Providing of services – Classification – Appellant is engaged in specialised post-production film activities such as Computer Graphics and Digital Restoration, which involve processing of digitised image data received from customers – Appellant provides these services to domestic customers and customers located outside India – In respect of services rendered to foreign customers, Appellant did not discharge service tax on ground that such transactions constituted export of services – Department issued show cause notices proposing demand of Service Tax under category of Video Tape Production Service – Commissioner confirmed demand proposed in show cause notice – Whether services rendered by Appellant are classifiable as Video Tape Production Service – HELD – It is an undisputed fact that Appellant does not undertake recording. Services are rendered on already recorded footage and the activity is purely post-production digital manipulation of data received from clients. Tribunal, in Appellant’s own earlier cases, had consistently held that post production digital services cannot be equated with video tape production service. Services rendered by Appellant do not fall under Video Tape Production Service – Appeals allowed - Export of service – Whether services rendered by Appellant to foreign clients qualify as “export of service” under Rule 6A of the Rules – HELD – It is an undisputed fact that service recipients are located outside India and consideration is received in convertible foreign exchange. Benefit of service accrues to foreign clients and the services are integrally used in their commercial activities abroad. Once place of provision is held to be outside India, all conditions of Rule 6A of the Rules stand fulfilled. Services rendered by Appellant being satisfied all conditions prescribed under Rule 6A of the Rules qualify as export of service. Consequently, no service tax is leviable on such services under the Finance Act. Demands confirmed against Appellant are wholly unsustainable in law. Impugned orders-in-original are set aside.
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