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TMI Blog2024 (10) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... available on the said satellite, they allocate some capacity to their customers for a consideration. The ld. Commissioner in the impugned order has also examined all the submissions made herein before us by the ld. Counsel for the respondent and after examining all the submissions, the ld. Commissioner has held that the services provided by M/s Intelsat are Telecommunication Services which are not taxable during the relevant period. The decision of the Tribunal in the case of Ushodaya Enterprises Pvt Ltd [ 2020 (3) TMI 457 - CESTAT HYDERABAD] , relied upon by the ld. AR, is not applicable in the present case as in that case the main issue involved was whether the hiring/leasing space in a satellite amounts to sale or deemed sale and is subject to service tax under Support Services of Business or Commerce ; whereas, in the present case the issue is whether the services rendered by the respondent fall under the category of Telecommunication Services or not. Thus, the ld. Commissioner has given detailed reasoning to hold that the impugned services fall under the definition of Telecommunication Services and not under Support Services of Business or Commerce and we do not find any infi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of Operating charges, Bandwidth Charges, Space segment, Transponder Services etc. On scrutiny of the invoices, it was observed that the service provider namely M/s Intelsat Global Sales and Marketing Ltd located in United Kingdom (hereafter in short M/s Intelsat ) has provided Transponder Services and for providing said services, the service provider has charged the service recipient in US$. It was also alleged that the respondent has received services in the name of Bandwidth charges, Space segment charges and Transponder charges. The terms Leased Bandwidth charges/transponder charges/spectrum charges/satellite bandwidth charges are different name for the same thing for teleport. For the respondent, M/s Intelsat is the only foreign satellite operator providing the transponder/spectrum/satellite bandwidth services to them. The respondent in their submissions before the audit team claimed that the Bandwidth charges, Space Segment charges and Transponder charges fall under the definition of Telecommunication Services as it existed before 01.07.2012. The respondent has received Transponder Services from a service provider situated outside India and has made payment to the said servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing their output service to their own customers. Therefore, it appeared that the services received by the respondent i.e. supply/allocation of capacity of transponders on a satellite of M/s Intelsat is operational/ infrastructure support for providing their output service i.e. Teleport service which is rightly classifiable under Support Services of Business or Commerce as defined under Section 65(105)(zzzq) of the Finance Act, 1994 and not under Telecommunication services as has been claimed by the respondent. Thus, it was imputed that from the definitions of Support Service of Business or Commerce and the nature of foreign currency payments amounting to Rs.26,49,72,124/- made by the respondent to M/s Intelsat, the service provider from a country other than India, the respondent being recipient of service is liable to pay service tax on foreign currency expenditure incurred for receiving the said services for the period from October 2010 to June 2012 on which service lax of Rs 2,83,77,531/- (including Cess and HSEC) appeared to be recoverable from them on account of Support Service of Business or Commerce received by them from M/s Intelsat by invoking the extended period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for the year ended March 31, 2011, the company was incorporated on October 6, 2008 with the principal object of inter alia , establishing, setting and operating uplinking hub (Teleport) including any other mode of uplinking downlinking facility with the accompanying amplification related processes uplinking TV signals, teleport services etc to provide end-to-end communication needs and video distribution and contribution services within and outside India; (iii) that the Adjudicating Authority also failed to appreciate the fact that as per copies of invoices raised by the respondent to their customers i.e. Taaza Infotainment Pvt Ltd, NDTV, Gujarat News Broadcasters Pvt Ltd, STV Enterprises etc, it is evident that their customers are broadcasting agencies and TV channels and that the respondent is providing service to these customers in the form of uplinking channel/content to the satellite and is charging the customers for the said service; (iv) that M/s Intelsat Global Sales and Marketing Ltd owns satellites in the space having a certain capacity i.e. transponder capacity and out of the said transponder capacity available on the satellite. they allocated some transponder capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable in law as the same has been passed without properly appreciating the facts and the law. 4.2 The learned AR further submits that the nature of service provided by the respondent cannot be classified as Telecommunication Service and appropriately falls under the definition of Business Support Service . 4.3 The learned AR further submits that the services received by the respondent i.e. supply/allocation of capacity of transponders on a satellite by M/s Intelsat is operational/infrastructure support for providing their output service i.e. Teleport service and therefore, the same is rightly classifiable under Support Services of Business or Commerce as defined under Section 65(105)(zzzq) of the Finance Act, 1994 and not under Telecommunication services . 4.4 The learned AR further submits that the sister concern of the respondent M/s Bharti Airtel Limited is also availing such transponder service from M/s Intelsat and they have voluntarily agreed and deposited the service tax alongwith interest on this issue for the period 2009-10 to 2011-12. 4.5 The learned AR relies on the decision of the Tribunal in the case of Ushodaya Enterprises Pvt Ltd vs. CCE ST, Hyderabad 2020 (42) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 19.12.2011 which clarifies that the telecommunication service is taxable only when it is provided by a person who has been granted a license under Section 4(1) of Telegraph Act. For this submission, he also relies on the on following judgements: M/s Vodafone Essar East Ltd. vs. Commissioner of Service Tax - 2023 (12) TMI 48 - CESTAT Kolkata M/s Vodafone Idea Ltd. vs. Commissioner of GST Central Excise - 2023 (10) TMI 432 - CESTAT Chennai Effective Teleservice P. Ltd. va. CCE ST - 2023 (2) TMI 827 - CESTAT Ahmedabad M/s Qualcomm India Pvt. Ltd. vs. Commissioner of Customs Central Excise - 2023 (3) TMI 332 - CESTAT Hyderabad 5.6 He further submits that the respondent is not liable to pay the tax solely on the basis that M/s Bharti Airtel Limited, its associated enterprise, paid the tax for the relevant period. Both the enterprises are two distinct taxpayers and payment by one group entity has no bearing on the respondent's liability to pay the service tax. 5.7 It is his further submission that the department has wrongly alleged that the services provided by M/s Intelsat to the respondent are classifiable under 'Business Support Services' as it is providing the infrastru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of any of the provisions of the Act or Rules with intent to evade payment of service tax. He further submits that in the present case the extended period of limitation cannot be invoked as there is no willful suppression of the facts and intention to evade tax on the part of the respondent and the issue in the present case involved the interpretation of complex provisions. In support of this submission, he relies on the decision of Allahabad Bench of the Tribunal in the case of M/s Planetcast Media Services Ltd. vs. Commissioner of Central Excise, Noida - 2024 (3) TMI 1101 - CESTAT Allahabad , the Tribunal has held that there has been a dispute in respect of interpretation of the term infrastructural support facility used in the definition of Business Support Services. Similarly, in the case of Dish TV India Ltd. vs. CCE ST, Noida 2020 (41) GSTL 633 (Tri. All. ), the Tribunal has held that the issue involves interpretation of complex provisions and hence, extended period of limitation cannot be invoked. 5.11 He also submits that in the case of Vedic Broadcasting Limited vs. Commissioner of Central Excise Service Tax - 2021 (45) GSTL 33 (Tri. Del.) , the department has itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent, therefore, the extended period of limitation cannot be invoked. For this submission, he relies on the following Judgements: M/s Mehta Construction Company vs. Commissioner of Central Excise, Panchkula - 2024 (3) TMI 284 - CESTAT Chandigarh M/s Goodyear India Ltd. vs. Commissioner of Central Excise and Service Tax, Delhi - 2023 (12) TMI 1009 - CESTAT Chandigarh 5.15 He further submits that even if the respondent is liable to pay service tax on transponder services under business support services , they are still eligible to take the credit of the tax paid on these services as the input services are utilised by them to provide the output services and the whole transaction becomes revenue neutral and therefore, extended period cannot be invoked. In this regard, he relies on the following case laws: M/s Coforge Smartserve Limited (Formerly known as NIIT Smartserve Ltd.) vs. Commissioner of Service Tax, New Delhi - 2024 (1) TMI 826 - CESTAT Chandigarh Chemoli Adani P. Ltd. vs. Commissioner of S.T., Ahmedabad - 2024 (4) TMI 1063 - CESTAT Ahmedabad M/s Khadim India Limited vs. Principal Commissioner, Central Goods and Service Tax, Delhi North - 2024 (4) TMI 1008 - CESTAT New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interconnection, settlement or termination of domestic or international calls, charging for jointly used facilities including pole attachments, charging for the exclusive use of circuits, a leased circuit or a dedicated link including a speech circuit, data circuit or a telegraph circuit; (v) provision of call management services for a fee including call waiting, call forwarding, caller identification, three-way calling, call display, call return, call screen, call blocking, automatic call-back, call answer, voice mail, voice menus and video conferencing; (vi) private network services including provision of wired or wireless telecommunication link between specified points for the exclusive use of the client; (vii) data transmission services including provision of access to wired or wireless facilities and services specifically designed for efficient transmission of data; and (viii) communication through facsimile, pager, telegraph and telex, but does not include service provided by- (a) any person in relation to on-line information and database access or retrieval or both referred to in sub-clause (zh) of clause (105); (b) a broadcasting agency or organisation in relation to broad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us by the ld. Counsel for the respondent and after examining all the submissions, the ld. Commissioner has held that the services provided by M/s Intelsat are Telecommunication Services which are not taxable during the relevant period. Here it is pertinent to reproduce the relevant findings recorded by the ld. Commissioner in the impugned order, which are reproduced herein below: 15.8 I find that the noticee has executed an agreement with M/s Intelsat (a foreign satellite service provider). I have gone through the sample copy of agreement. I find from the agreement that M/s Intelsat is providing Transponder Service to the noticee. Under the Transponder Service, M/s Intelsat is giving the noticee right to use its transponder capacity of a satellite by allocating a particular bandwidth on that transponder. The noticee further uses the service provided by M/s Intelsat to provide their output services to their customers i.e. broadcasting agencies and TV Channels in the form of uplinking their content/channel to the satellite. Therefore, these activities are clearly and expressly covered in the Telecommunication Services . 15.9 I find that the telecommunication services are taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Business Support Service prior to 08.04.2011 restricts coverage under the definition operational assistance for marketing . However since the activities are specifically covered under Telecommunication Service , there is no need to give any further finding on it. 15.13 I have also perused the judgment passed by Tribunal Delhi relied upon by the noticee notably in the case of Vodafone Essar Mobile Vs. Commissioner of Service Tax, Delhi [2017 (6) GSTL 67 (Tri-del)], wherein it has been held that the telecom services provided by the noticee are covered under specific entry Telecommunication Service and 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. In this matter, Tribunal relied upon in almost similar situation, the clarification issued by Board vide letter dated 19-12-2011 that what otherwise constitutes telecommunication service cannot amount to any other taxable service. This judgment reinforces the view taken by me. 15.14 In view of above discussion, I hold that the transponder services provided by M/s Intelsat to the noticee are in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any of the provisions of the Act or Rules with intent to evade payment of service tax. We find that the department has not established any ingredients which are required to invoke the extended period. 12. We also find that Allahabad Bench of the Tribunal in the case of M/s Planetcast Media Services Ltd. (supra ) has held that there has been a dispute in respect of interpretation of the term infrastructural support facility used in the definition of Business Support Services. In this regard, we may reproduce the relevant finding of the said decision, which is reproduced herein below: 4.15 Uplinking facility from the teleport: In this case we find that issue involved is purely of interpretation of the terms of agreement vis a vis the provisions of the Act. On going through the terms of agreement which we had earlier reproduced and discussed we are of the view that appellant were entertaining a bona fide belief that these service would not be classifiable under any of the taxable categories. There is nothing in the agreement to show that appellant could not have entertained such a belief. Also we find that there has been dispute in respect of interpretation of the term infrastructu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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