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TMI Blog2014 (11) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... uant is to ensure that network VPN functions properly. The Commissioner has totally misread the meaning of “Services provided in relation to online information and database access or retrieval”. Clearly the service provided has to relate to information access/retrieval. And EQuant has not provided information and database. The ownership of data is with the FOs. This is a vital fact. The Commissioner's finding that it is not necessary that the original data should emerge or originate from the provider of VPN network is an incorrect reading of section 65(75) and 65(105)(zh). The service provided by Equant will more aptly fall under telecommunication service if provider is licensed under Indian Telegraph Act. Reliance is placed on the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-Managed (Gold Lite) IPVPN service, customer shall supply, install manage and maintain the CE routers. The CE router, installed at the customer location, connects to the PE router through an access medium that is fully transparent to the service. The CE router must be equipped with one or more LAN interface types that connect the Customer's LAN to the Equant IP VPN network . 3. The case of the Revenue is that the applicant received the Taxable service from Equant defined in the Finance Act, 194 in section 65(105)(zh) as - Taxable service means any service provided or to be provided to any person by any person in relation to on-line information and database access or retrieval or both in electronic form through computer network, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the SBI data centres abroad to which the foreign offices were attached. They only provided network service that provides secure IP internet working which enables connectivity and, therefore, the service provided is only that of bandwidth provider and not of online information and data base access/retrieval. Rejecting the appellant's contention, the adjudicating authority held that bandwidth provider, Equant has provided computer network to access or retrieve data even if the original data did not emerge from the service provider and therefore bandwidth provider Equant has provided online information and database access to SBI which is a taxable service under section 65(105)(zh). The Adjudicating Authority however, conceded that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The bills raised by Equant are also issued to FOs and the payment is made by FO to Equant. Therefore, according to the ld. Counsel there is no import of service in this case. 5.1 The other point emphasised by the ld. Advocate is that for the activity to fall under Online information and database access or retrieval there are four essential ingredients namely, - There must be provision of data. - Data must be retrievable - Must be provided in electronic form - Must be provided through computer network They emphasised that they neither provided data nor retrieved the data. They relied on the decision of Tribunal in the case of United Telecom Ltd. 2009(18)STT 495. 6. The ld. Special counsel ShriK.M.Monda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 2006. 9. If we examine the case vis- -vis the coverage of section 65 (105)(zh), here again the department is on a weak footing. The very description under the contract between SBI and Equant shows that Equant IP VPN is a managed network service that provides secure IP internet working which enables connectivity. The IP VPN network does not allow customers routers in different VPNs to connect with one another. Therefore, it is clear that the said VPN does not provide connectivity between SBI domestic office and SBI foreign office. Further, on going through the definition in section 65(75) it is seen that the same describes the service to be providing data or information retrieval or otherwise to a customer . In the present case, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception by a person who has been granted the licence under the first proviso to sub-section (1) of section 4 of the Indian Telegraph Act, 1885 and includes - data transmission services including provision of access to wired or wireless facilities and services specifically designed for efficient transmission of data. The service provided by Equant will more aptly fall under telecommunication service if provider is licensed under Indian Telegraph Act. Reliance is placed on the case of United Telecom Ltd. (supra). However, the provider of telecommunication service would be Equant but this is not the subject matter of the present d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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