2005 (7) TMI 3

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..... on 3 of the Indian Telegraphic Act, 1885 and includes a person who has been granted a licence under the first proviso to sub-section (1) of Section 4 of that Act." Tax is payable on ad valorem basis. The value of taxable service has been defined in Section 67 at serial (b) as under : "in relation to telephone connection or pagers provided to the subscribers shall be the gross total amount (including adjustments made by the telegraph authority from any deposits made by the subscribers at the time of applications for telephone connections or pagers) received by the telegraph authority from the subscribers". 2.The dispute in the present case is about valuation of taxable service in the case of PCOs of the appellant M/s. Bharti Infotel Ltd. .....

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..... he appellant is one of agent and principal. 5.The agreement between the appellant and the PCO operator is as follows in regard to the relationship : Annex 1 -Terms and conditions for Touchtel STD/ISD - PCO connections in urban areas [Annex to the Touchtel STD/ISD - PCO Customer Agreement Form] The terms and conditions for subscribers of Touchtel STD/ISD-PCO connection(s) are as follows - 1.         Initial security deposit of Rs. 2000 per STD/ISD-PCO connection is to be made with Touchtel at the time of signing the "Customer Agreement Form", balance security deposit of Rs. 3000/- payable in equal installments in the first three bills. The deposit amount can be paid by cash/demand draft/pay order i .....

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..... the payment 1st to 15th day of the month 16th day of the month 22nd day of the month 16th to last day of the month 1st day the next month 7th day of the next month 6.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 .....

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