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2021 (9) TMI 452 - AT - Service TaxLevy of penalty u/s 78 of FA - Demand of service tax on roaming charges - Failure to discharge tax dues - appellant herein was not even placed on notice for non discharge of tax - Period between 18th April 2006 and 16th May 2008 - HELD THAT:- The licence 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 outside the country is utilised but, nonetheless, are not placed at the disposal of the appellant; 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 business or commerce’ which is the ‘taxable service’ sought to be fastened on the appellant as ‘deemed provider’ under section 66A of Finance Act, 1944. Consequently, the demand of tax on ‘roaming charges’ and ‘call termination charges’ in the impugned order fails. Tax liability of ₹ 12,74,60,204, ₹ 35,10,51,305 and ₹ 3,02,65,333 under section 73 of Finance Act, 1994, along with interest thereon under section 75 of Finance Act, 1994, penalties under section 76 and penalty under section 78 of Finance Act, 1994 are set aside - Appeal allowed.
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