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2005 (7) TMI 3 - CESTAT, NEW DELHIValuation of taxable service in the case of PCOs - Price charged by the PCO operator from the PCO user (customer) - HELD THAT:- According to the SDR this definition of subscriber takes in customer also. Learned SDR also contends that PCO operator is only an agent of the appellant. It is being submitted that this position is clear from the fact that the appellant fixed the rate at which the PCO operator (the agent) will be charging the customers. She also points out that there are other conditions in the agreement requiring the display of appellant's logo, fixing of working hours of the PCO, service to Airtel customer etc. She has also emphasized that the Commissioner has held that the relationship between the PCO operator and the appellant is one of agent and principal. In regard to a public telephone, there are three entities - (i) telegraphic service provider (ii) subscriber and (iii) customer/user. It is clear from the definitions in the Act that customers/users of phone are not recognized in the scheme of the levy. The tax is in regard to a telegraphic service provided to the subscriber. Valuation is also based on the "gross total amount" received by the provider from the subscriber (the receiver of the service). The amendment in 2001 referred to by the ld. SDR did not make any difference to this scheme. It only recognizes services like facsimile as telephone service. Thus, the amount charged by the PCO operator from the customer has no relevance for valuation. Valuation of service provided by the appellant to the subscriber cannot be based on amount charged by the PCO operator from the customer. In the present proceeding, the additional service tax is demanded on this basis. It is clearly contrary to the scheme of valuation provided in the Act. The impugned order is therefore, set aside and the appeals are allowed with consequential relief, if any, to the appellant.
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