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TMI Blog2021 (9) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... the subscriber is provided in entirety, or for continuity of service, directly by the overseas operator. The premise of the adjudicating authority that infrastructural facilities of the overseas operator are made use of by the appellant has no basis in facts. The billings for each such use are transmitted through the appellant to the subscriber as separately itemised charges which, though paid on demand to the overseas operator by the appellant, is to be recovered from the subscriber - It is not the case of the service tax authorities that the amount paid by the subscriber in relation to roaming charges or for international calls are subsumed in the revenues of the appellant. The separate and distinct itemisation in the billing forecloses such supposition. The appellant, as a licencee of the domestic telecommunication regulatory regime, is not conferred with empowerment to operate in a foreign territory and can neither, conceivably, offer such service independent of the overseas entity nor avail of the equipment of overseas operator for rendering telecommunication service to its subscribers. The activity, therefore, lies outside the ambit of support service of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation charges and ₹ 64,17,94,492 towards carrier charges to overseas telecom operators. Again, in this dispute, there is no controversy that appellant was contractually obliged, in accordance with universal industry practice, to recompense overseas operators. Nonetheless, it is their cavil that the adjudicating authority has contrived an unwarranted enlargement of one of the elements of support service of business or commerce of overcoming the limitations of legislative intent to tax only telecom services provided within the country. 3. Learned Chartered Account put forth the proposition that the expression infrastructural support service of the definition of support service of business or commerce in section 65(104c) of Finance Act, 1994, upon which the adjudicating authority has rested the entire demand, cannot be expanded beyond the specifics of the enumeration to encompass all and any kind of infrastructure for which he placed reliance on the decision of the Hon ble Supreme Court in South Gujarat Roofing Tiles Manufacturers Association v. State of Gujarat [1976 (10) TMI 147-Supreme Court] and its application in the decision of the Tribunal in Air Liquide No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same time, provide ourselves with that steady and unwavering beam within which we will find the resolution to this dispute. 11. After a futile attempt, through a provision in the Service Tax Rules, 1994, to accord a national treatment to services received from abroad that should, in equity, be subject to the same tax that a provider and receiver situated within the domestic territory is, legislative sanction to incorporate Section 66A in Finance Act, 1994 was accorded with effect from 18th April, 2006. The key expression authorising the collection of tax dues from the recipient of the service as a deviation from the norm of placing the burden on the provider is .and such taxable service shall be treated as if the recipient had himself provided this service in India, and accordingly all the provisions of this Chapter shall apply : 12. It is apparent that legislative wisdom considered it necessary to discard for this purpose the use of the expression person liable to tax that applies to reverse charge in a domestic situation and to substitute it with the legal fiction of the recipient being deemed to be the provider of the service and, thereby, subject not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to claim exclusion from taxability. Ignoring these expectations, an analysis of the various decisions points to the convergence of thinking apparent in the judicial interpretations. in Korean Air v. Commissioner of Service Tax-I, Mumbai [2017- TIOL-3332-CESTAT-MUMBAI]. The nuance of this levy, fashioned by legislated enactment and shaped by judicial precedent, and the particular characteristics of the taxable service rendered by the appellant, inextricably conjoined as they are, impact the legality and propriety of the impugned order to which we now address ourselves. 6. As a public utility inhering in the State, telecommunication is regulated by the municipal laws of each country legislated specifically for oversight. Owing to this, taxability is couched with reference to the licensing provisions which, inevitably, has a bearing on the manner in which national treatment is accorded to the access beyond the jurisdiction - whether temporarily based outside India or while engaging in cross-border communication - of such legislation. The appellant is a telecommunication operator licensed by the relevant regulatory agency and, in that capacity, is authorised to offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e telecom service using the connectivity provided by roaming partner of the appellant in that foreign country. There is no dispute that the services provided by the foreign telecom Company is squarely covered by the tax entry telecommunication service . However, the tax liability could not be brought in only for the reason that the said provider of service in foreign country is not a Telegraph Authority as required under Finance Act, 1994. The question now is such services, otherwise recognized as telecom service, which can be subjected to tax if provided in India by a Telegraph Authority, can be brought under tax under a different tax entry, namely, Business Auxiliary Service. We note examining an almost similar situation, the Board has categorically clarified vide letter dated 19-12-2011 that what otherwise constitutes telecommunication service cannot amount to any other taxable service. Further, we also note in parallel situation examining the tax liability of an activity, which is otherwise covered, in a tax entry, can be taxed under the category of another tax entry has been examined by the Hon ble Kerala High Court in the case of Federal Bank Ltd. (supra). Here also we note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jecting it to tax as support service of business or commerce from the Explanation for definition of infrastructural support service included therein. This revisit is squarely applicable to carrier charges in the present dispute which is consideration for usage akin to private circuit leased to users save that it is the public network which is offered at operator-to- operator level for cross-border transmission of data or voice signals. 11. We have already taken note of the licence that enables entities like the appellant to offer services to its subscribers; the charges due from subscribers are also itemised in the bills raised for payment at pre-arranged intervals. No other operator is contractually competent to collect charges from the subscriber. At the same time, the constraints of territorial licencing whether within the country or outside it, though, in this dispute, the former does not concern us impede provision of service to subscribers who are physically, albeit temporarily, outside the licence territory and in facilitating communication of calling party subscriber in India with called party in another territory. Doubtlessly, the equipment of licencee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05. These arguments are equally applicable for the period from 1-5-2006, since when the service is classifiable as Banking and Financial Services , because this service is also specified under Rule 3(1)(iii) of Export of Services Rules, 2005 and not under Rule 3(1)(ii). it is the flow of consideration that renders the provision of service complete. It is not the case of the service tax authorities that the amount paid by the subscriber in relation to roaming charges or for international calls are subsumed in the revenues of the appellant. The separate and distinct itemisation in the billing forecloses such supposition. 13. It only remains to be seen if, by any stretch, the services of the overseas entity are input service for the appellant. The manner of billing and the specific stage at which the subscriber becomes dependant on the overseas entity controverts that possibility. The appellant, as a licencee of the domestic telecommunication regulatory regime, is not conferred with empowerment to operate in a foreign territory and can neither, conceivably, offer such service independent of the overseas entity nor avail of the equipment of overseas operator for renderi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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