2012 (7) TMI 505 - AT - Service Tax

Business Support Service - Interconnection infrastructure and space facility to Basic Telephone Service Providers - demand of service tax on infrastructure charges port charges rent for space etc - Held that - Space and infrastructure provided by the Appellant to the private operators enabling them to carry out their activity falls under the perview of business support service in terms of definition of such service in Section 65(104c)that brought it to the fold of Section 65(105)(zzzq) and tax liability arose - thoroughly examining the ST Circular No. 46/09/2002 dated 8.8.2002 clarified that when space is used rental thereof shall not be liable to service tax but such a clarification was mis-interpreted by the appellant to claim immunity from taxation - the appellants could not bring out any material to suggest that this is out of ambit of that section - against assessee.

Summary

Issues:
Appeal against service tax liability on infrastructure charges and space facilities provided by the appellant to Telecom Service Providers.

Analysis:
1. The appeal arose from the order passed by the First Appellate Authority, holding the appellant liable for service tax on infrastructure charges, port charges, and rent for space provided to Basic Telephone Service Providers. The adjudication period was from February 2007 to May 2007. The Appellate Authority found that the appellant's activities fell under the definition of Business Support service under the law.

2. The appellant argued that it should not be taxed under Business Support service as it was already paying service tax for Telecom Services provided from its campus. The appellant contended that Circular No. 46/09/2002 was misinterpreted, and the nature of its activities was not appropriately considered. The appellant also raised concerns about being taxed on immovable property and requested leniency due to being a public sector entity.

3. The Departmental Representative supported the order of the Appellate Authority, upholding the service tax liability on the appellant for providing infrastructure support services.

4. The Tribunal examined the adjudication order and the appellant's contentions. It found that the appellant's provision of space and infrastructure to private operators fell within the definition of Business Support service, leading to tax liability under the Finance Act, 1994. The Tribunal also analyzed Circular No. 46/09/2002 and concluded that the appellant's activities were taxable under the relevant provisions.

5. Referring to previous decisions, the Tribunal emphasized that all litigants are equal before the law, denying special consideration based on being a public sector entity. The Tribunal dismissed the appellant's arguments and allowed the stay application, disposing of the appeal due to both parties presenting their case comprehensively.

6. Consequently, the Tribunal disposed of both the stay application and the appeal, affirming the service tax liability on the appellant for providing infrastructure support services to Telecom Service Providers.