TMI Blog2003 (12) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,880/- and Rs. 44,84,402/- towards interest under Section 75 of the said Act for the belated payment of service tax. However, the Commissioner has dropped the demand of service tax/interest on the surcharge amount collected. 2. The brief facts of the case are that M/s. Chennai Telephones (now BSNL) are the service providers of telephones and registered with the Department under Section 69 of the Finance Act, 1994. They also render the service of provision of circuits to the subscribers on payment of annual fees. They also collect surcharge from the customers for the belated payment of such annual fees. As they did not pay service tax on the above amount, a show cause notice dated 19-1-2000 was issued by the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 7-12-98 that the impugned services are subjected to levy of service tax. Therefore, in view of this clarification, he held that appellants had collected service tax retrospectively from the customers and, therefore, he upheld the demand of service tax as confirmed by the lower authority. 3. We have heard ld. Counsel, Shri S. Ignatius for the appellant and ld. SDR, Smt. R. Bhagya Devi for the respondent. 4. Ld. Counsel relied on the judgment of the Delhi Bench rendered in the case of Hexacom (I) Ltd. v. CCE, Jaipur - 2003 (156) E.L.T. 357 (Tri.-Del.) wherein it has been held that service tax on leased circuits is not imposable and collectable. He, further, submitted that each of the heads in the Finance Act has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notification i.e. 16-7-2001. We have also noticed that there is a difference between the telephone connection/line and leased circuit. The appellants have filed a chart showing the difference in its functioning and in the way in which the charges are collected from the customers. The telephone connection/line operates on electronic switch located in the telephone exchange while the leased circuits is permanently made available for 365 days 24 hours a day, to the telephone user. There is no telephone number in the case of leased circuits and only computers along with associated accessories are connected to the line. It is meant only for data communication and not for voice communication, while in the case of telephone connection/line, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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