TMI Blog2007 (1) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The appellant is licensed under the Telegraph Act to provide mobile telephone services within the State of Gujarat; (b) They have communication network of their own; they have subscribers of their own and they are also paying service tax on the call charges collected from their subscribers; (c) Their subscribers are talking not only amongst themselves but also talk to subscribers of other telecom authorities and receives the calls originating in the network of other telecom authorities whether basic or mobile. There is an arrangement by which the facilities of different telecom authorities are shared and the expenses and incomes are shared. There is, therefore, interconnectivity between basic/cellular operators either for transit or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges collected by the appellants is only for services rendered by the appellant by use of their network in terminating the calls. (c) For example, m the case of Reliance Infocomm, who are a later entrant, Reliance Infocomm were required to provide the infrastructure for link and thereafter when calls from their subscribers are received, they are received into switches installed in the exchanges maintained by the appellant; when Reliance Infocomm subscriber makes a call, the facilities of not only Reliance Infocomm is used but also the facilities of appellant is used. However, the charges for the calls are collected only by Reliance Infocomm, a part of it shared by Reliance Infocomm to the appellant-company. Similar is the arrangement in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or a telex. Further the 'leased circuit' is also available to any common subscriber as in the case of hot lines ; (h) The Karnataka High Court which dealt with the nature of services rendered by PCO in the case of PCO v. Telecom Authority has taken the view that PCO themselves function as telecom authorities and that they cannot be treated as subscriber and that service tax collected by them as PCO has to be paid directly to the Central Government. 5. The learned Authorised Representative of the department during the course of his arguments and in the written summary of submissions made, inter alia, the following submissions: (a) The agreement between the appellant-company and the other telecom authorities are referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty cannot only be provider of services but also receiver of services and therefore the appellant-company can fit in as a person and as a subscriber while receiving the services from an other telecom authority. (g) As regards the claim of revenue neutrality when no tax has been paid, the question of availability of Cenvat credit cannot and does not arise. Further, service tax on leased circuit was payable on and from 16-7-2001 while benefit of Cenvat credit has been extended to service tax only in 2003. 6. We have carefully considered the rival submissions. To enable the subscribers of one telecom authority to access the subscribers belonging to other telecom authority there has to be interconnection between the telecom authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by the appellant-company, as held by the Commissioner, the question of appellant-company paying IUC charges on identical rates to Reliance Infocomm should not arise. 7. Similar is the arrangement between the appellant-company and other telecom authorities. The charges of 30 paisa for every pulse (each call is measured in terms of number of pulses for the purpose of calculating charges) by the concerned telecom authority is irrespective of who owns or established the link or circuit. This goes to show that the charges calculated cannot be merely for the purpose of using the connecting circuit between two telecom authorities 8. When a call for one telecom authority is made to a subscriber belonging to another telecom author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowings emerges: (a) That no telegraph authority can be treated as subscriber of another telegraph authority in relation to the link established between one telegraph authority and another telegraph authority; (b) The IUC charges collected by each telecom authority for the calls terminating to the subscribers under them emanating from other telecom authorities cannot be treated for use of leased circuit ; (c) No telegraph authority can be held to be providing a dedicated link to the subscriber in the network of another telecom authority during the duration of a call between his subscriber and the subscriber in the terminating telecom authority. (d) No grounds have been adduced to hold the charge of @ 30 paisa per pulse collect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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