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TMI Blog2008 (7) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... Coin-Ope)15-3/ST/PII/05- 9.3.06 December, 2004 to June, 2005 7204115.00 Edn Cess 144082.00 (v) V(Coin-Ope)15- 60/ST/PII/06- 24.7.06 July, 2005 to February, 2006 6909076.00 Edn Cess 138182.00 3. The Commissioner, after following the necessary adjudication proceedings, has confirmed the service tax demands as proposed in the five show cause notices referred to above, under Section 73 of the Finance Act, 1994. She has also demanded interest under Section 75 ibid and imposed penalties on the appellants under Sections 76, 77 and 78 ibid. 4. Heard both the sides and perused the records. 5. We find that the issue involved in the instant case is regarding admissibility of the exemption under Service Tax Notification No. 3/94-ST dated 30.6.1994. The said Notification exempts certain taxable services mentioned in the table annexed to the notification from the whole of Service Tax. For the present proceedings Sr. Nos. 12 and 13 are relevant. Sr. No. 12 - Departmentally run public telephones for local calls Sr. No. 13 - Guaranteed public telephone operating only for local calls. 6. On perusal of the agreement for the public call office entered into between the private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge within the same exchange system. According to sub clause (k) of Rule 2, "exchange system" means any department telephone exchange or exchanges and any line connected therewith declared by the telegraph authority to be an exchange system. This means that the local calls are made within the same exchanges but when the mobile phones are on roaming, they can be in a different exchange other than the exchange in which the coin box is situated. Hence, calls other than the local calls can also be made from the coin box. 9. The appellants have contended that while confirming the demands, the Commissioner has relied on the definition of 'local calls' as given in the Indian Telegraph Rules, 1951, which is an archaic and antiquated law. They stated that telephony is no longer a primitive subject of the time of Alexander Graham Bell, who made first use of telephone. World over, there is amazing technological advancement in this area and India cannot remain behind just because the deficiencies in the Finance Act related to the taxable service of the kind of telephone services. 10. Further points raised by the appellants are as under: (i) The definition of "Local call" as explained in sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State. Therefore, the calls originating from CCB PCO (basic service) and terminating to cellular mobile subscriber is treated as local call as per the definition of TRAI in the changed environment. The dialing with starting digit of 'o' (STD) and '95' are barred from CCB PCOs and hence no 95 and STD dialing facility is allowed from CCB PCOs. In case mobile calls are made from CCB PCO to cellular mobile subscriber who is roaming beyond the home (Circle or State) LSA (licensed Service Area) say Gujarat then roaming tariff is applicable to the cellular mobile Telephone subscriber [CMTS/USAL] for which the Service Tax is being paid by the respective CMTS/USAL operators. (iii) In the Compendium in Telecom Revenue and Commercial Orders (corrected upto July, 2004) by Shri S. Venkatraman, 2004 edition, the following terms are defined: "Local area - The geographical area served by an exchange or an exchange system and which is co-terminus with Short Distance Area (SDCA) or where the telegraph authority has declared any area served by an exchange system to be the local area for the purpose of telephone connections. All exchanges within the local area will be treated as multi exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of 1999) dated 28.5.1999 and its amendment dated 17.9.1999 which are for the purpose of sharing of the revenue between different telephone service providers cannot be applied for interpretation of words "local calls" given in the Notification No. 3/94-ST. The definition given in the Regulation dated 28.5.1999 and its amendment dated 17.9.1999 does not ipso facto change the definition of local calls given in the Indian Telegraph Rules, 1951. In fact, no amendment has been carried out in these Rules and to claim that these rules have lost their relevance will be a disregard to the statutory provisions. 12. We have carefully considered the rival submissions. To prevent miscarriage of justice not only commercial facts (which can be understood quickly by the commonest man) should be considered but more emphasis must be given to each and every minute technical aspect and the term used. This is a sina qua non, when the matter before us is the most complex Science of Telecommunication. The terms involved such as 'local calls', 'local area', 'Exchange' etc are highly technical. 13. We note that the following is an abstract from Telephone Rules, 1999 edition by Muthuswamy and Brinda: "D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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