TMI Blog2015 (9) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 subscr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 to 2005-2006 was confirmed along with interest. Penalty under Section 78 of the Finance Act, 1994 was also imposed. The said demand has been confirmed under two services : (i) Leased circuit service Section 65(60)/(105)(zd) of the Finance Act, 1994 - ₹ 1,01,82,467/-. (ii) Business Auxiliary service 65(19) /(105)(zzb) ibid - ₹ 74,27,181/-. The adjudicating authority has held that the appellant had leased dark fibre cables but did not pay service tax under the leased circuit service. Similarly, it leased towers space on its microwave towers for installation of equipment of various cellular telephone operators which was held to be covered under Business Auxiliary Service on which no service tax was paid. The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Business Auxiliary Service. (vii) With effect from 1.6.2007 they are paying service tax on tower lease charges under telecommunication service. (viii) There was no wilful mis-statement or suppression of facts on its part. 3. The ld. DR on the other hand stated that the services are covered under the respective (two) taxable services and the extended period is invokable because in spite of there being no ambiguity and the appellant being duly registered under leased circuit service, it did not pay service tax on dark fibre and did not timely provide the data in spite of repeated reminders. 4. We have considered the contentions of both sides. As regards the leasing of space on microwave towers is concerned, the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax with effect from 1.6.2007 on the amount received for leasing of tower space is being remitted by the appellant under tele communication service. It, however, has stated that prior to 1.6.2007 service would be classifiable under Business Auxiliary Service (BAS). The definition of BAS given in Section 65(19) of the Finance Act, 1994 is reproduced below : Business Auxiliary Service means any service in relation to, (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease of tower space on its microwave towers to various cellular operators is not sustainable. 5. Coming to the leased circuit service, it is admitted that the appellant had leased dark fibre cables. The leased circuit is defined under Section 65(60) of the Finance Act, 1994 is as under :- Leased Circuit means a dedicated link provided between two fixed locations for exclusive use of the subscriber and includes a speech circuit, a data circuit or a telegraph circuit. Subscriber is defined under Section 65(104) ibid is as under : Subscriber means a person to whom any service of a telephone connection or a facsimile (FAX) or a leased circuit or a pager or a telegraph or a telex has been provided by the telegraph authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was even registered for leased circuit service, and therefore was not unaware thereof. Bonafide belief is not some sort of hallucinatory belief. It is a genuine belief of a reasonable person operating in an appropriate environment. Thus for such as 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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