2017 (8) TMI 1121 - HC - Service Tax

Business Support Services - Whether infrastructure or port , charges for the space provided by the appellants to private operators enabling them the access of interconnection links , is covered under Telecommunication Service , defined in Section 65(104c) of the Finance Act 1994? - Circular dt. 12.3.2007 - Held that - the tribunal requires to review the complete matter and give a fresh decision in view of the fact that when the earlier decision was rendered it was lost in transit which is not permissible - appeal allowed by way of remand.

Summary

Issues:
1. Challenge to Tribunal's judgment and order.
2. Interpretation of 'Telecommunication Service' under the Finance Act 1994.
3. Taxability of charges for infrastructure or port facility.
4. Review of service tax on interconnection service.
5. Quashing of tribunal's order and remittance for fresh decision.

Analysis:
1. The appellant contested the judgment and order of the Tribunal, challenging the decision rendered on 18.10.2011, despite being heard on 1.8.2011. The High Court admitted the appeal and framed substantial questions of law for consideration.

2. The primary legal issue revolved around whether charges for infrastructure or port facility, enabling private operators access to interconnection links, fall under the definition of 'Telecommunication Service' as per Section 65(104c) of the Finance Act 1994. The court examined the specific notifications dated 25.04.2006 and 22.05.2006 to determine the taxability of such charges.

3. The appellant submitted a detailed paper book outlining interconnection charges, including provisions for interconnectivity to BSNL network, setup costs, connection charges, and interconnect usage charges. The court analyzed the circular dated 12.3.2007, which clarified the taxability of interconnection services provided by telecom operators.

4. Considering the divergent clarifications issued in the past, the court emphasized the need for a fresh review of the matter by the tribunal. The circular highlighted that, prior to the amended definition of 'telecommunication service' under the Finance Act 1994, service tax was not applicable to interconnect usage charges. The court directed the tribunal to expedite the review process and provide a fresh judgment.

5. Consequently, the High Court quashed the tribunal's order and remitted the matter back for a fresh decision. The court clarified that it had not expressed any opinion on the merits of the case, urging the tribunal to consider all contentions presented in the paper book after hearing both parties. The appeal was disposed of, emphasizing the need for a comprehensive reconsideration of the legal issues involved.