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TMI Blog2018 (4) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, proceedings were initiate d against them to demand and recover service tax not paid by them. The original authority after hearing the appellant adjudicated the case. He confirmed service tax liabilities under various headings for different periods. The total liability confirmed is Rs. 1,40,45,132/ - along with penalties under various Sections of Finance Act, 1994. 2. The Id. Consultant appearing for the appellant submitted that there are 4 different issues involved with the service tax demand confirmed by the lower authority. The first issue is with reference to supply of content like news, ring tone, games, SMS, alerts etc. to telecom operators who provided it to the subscribers. The Revenue held a view that the said service is liable to be taxed under the support of business and commerce for the period 01.05.2006 to 31.05.2007. Ld. Consultant submitted that the said service was more specifically covered under the category of development and supply of content as per the ratio laid down by Hon'ble Andhra Pradesh High Court in BSNL case - 2012 (25) STR 321 (A.P.). Contesting the finding of the original authority that the said service is liable to be taxed under BSS for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat ground relying on the decision of Jet Airways India Ltd. - 2016 (44) STR 465 (Tri. - Mum.) (re a d with rectification order), the Id. Consultant pleaded that there is no loss to the Government and no tax liability that too involved in extended period can be confirmed against the appellant. 6. The Id. Consultant also contested the demands wherever involving extended period and also imposition of penalties on the ground that the issues involved as discussed above are all with reference to interpretation of statute and also considering the eligibility of the appellant for credit of such tax payment, no malafide can be attributed. 7. The Id. AR contested the appeal stating that the contents provided by the appellant to the telecom operators is clearly supporting the business of such operators. The Original Authority examined the defence submitted by the appellant regarding the tax liability under a new tax entry as well as under the old tax entry, BSS. Ld. AR submitted that applying the provisions of section 65 A the original authority arrived a t a correct finding regarding tax liability of the appellant for whole of the period. Regarding the tax liability in pursuance of agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extual, audio, visual etc.) and/or accessibility (ability to access) of such data or content in the network of the service provider. "Value added services" fall within the ambit of "telecommunication services" as defined in Section 2(k) of the TRAI Act and Section 65(109a) of the Finance Act, 1994. Ringtones, music downloads, wall paper, music clips etc., fall within the definition of "development and supply of content" under Section 65(36c) and constitute "taxable service" under Section 65(105) (zzzb) of the Finance Act, 1994." 10. Regarding the contention of the Id. AR that the services could still be taxed under BSS for the period prior to the introduction of a new tax entry, we note that BSS did not under go any statutory change during the relevant time, when new tax entry was introduced for development and supply of content under Section 65 (36)(c) of the Finance Act, 1994. The Tribunal in Diebold Systems (supra) held that introduction of a new entry for the purpose of levy of tax pre - supposes that it was not covered by any of the pre - existing entries. In other words, in the ever widening spare of service tax addition of an item to the list of taxable services is just an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same will fall under the overall category of infrastructural support service, which is part of the BSS. Regarding the contention of the appellant that they need not pay service tax as the situation is revenue neutral, we note that the question of revenue neutrality as a legal principle to hold against a tax liability is not tenable. In other words, no assessee can take a plea that no tax need have been paid as the same is available to them as a credit. This will be against the very basic canon of value added taxation. The revenue neutrality can at best be pleaded as principle for invoking bonafideness of the appellant against the demand for extended period as well as for penalty which require ingredients of malafide. Reliance was placed by the Id. Consultant regarding the submission on revenue neutrality, on the decision of the Tribunal in Jet Airways (supra). We have noted that in the said decision the Tribunal recorded as admitted facts that the appellant are using the said facility for the taxable output services. We note that no such categorical assertion can be recorded in the present case. Even otherwise we note that the availability or otherwise of credit on input service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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