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2015 (9) TMI 733 - AT - Service TaxLeased circuit service - leasing of dark fibre cables - telegraph authority. - leasing of space on microwave towers - Business Auxiliary service - Penalty u/s 78 - Held that:- Leasing of tower space does not fit under any limb of the definition of Business Auxiliary Service quoted above. The adjudicating authority’s observation that lease of tower space also promotes the service provided by the cellular telephone operator is not based on any sound logic or rationale. Further there is nothing in the Finance Act, 1994 to even suggest that there was a transplant of any part of BAS into telecom service with effect from 1.6.2007 which by implication means that the service was not taxable under Business Auxiliary Service prior to 1.6.2007. Thus we are of the view that the demand of ₹ 74,27,181/- confirmed under Business Auxiliary Service on the amount received for lease of tower space on its microwave towers to various cellular operators is not sustainable. - Decided in favor of assessee. Leased circuit service - The appellant has conceded that it has been granted a licence under Section 4(1) of Indian Telegraph Act, 1885). So it is clearly a telegraph authority as defined under Section 65(111) of Finance Act, 1994. It thus becomes clear that the dedicated dark fibre cable link was provided to a subscriber by a telegraph authority and therefore all the requirements of Section 65(105))(zd) (according to which the taxable service is “to subscriber by a telegraph in relation to a leased circuit”) are clearly satisfied inasmuch as leased circuits were provided by the appellant, whose is a telegraph authority, to a subscriber. Thus the demand pertaining to leased circuit service is clearly sustainable on merit. - Decided against the assessee. Extended period of limitation - Held that:- for the assessee as the appellant, it could not have been a bona fide belief on its part that the service rendered did not fall under leased circuit service because there was no scope of any confusion or ambiguity in that regard. Further, the appellant did not timely provide the information sought and had to be issued repeated reminders. Therefore we are of the view that the appellant is guilty of suppression of fact and therefore the extended period has rightly been invoked and mandatory penalty is clearly imposable. - Decided against the assessee.
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