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TMI Blog2016 (1) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... y the originating telecom operators to the terminating telecom operator for the service provided by the terminating telecom operator. The termination charges are governed by the guidelines issued by the Telecom Regulatory Authority of India (TRAI). The actual charge of SMS termination service between the operators began with effect from 01/04/2011. Although some operators agreed to pay for SMS termination service to the terminating telecom operators i.e. the appellant in this case, whereas following six operators did not sign any agreement with the appellant for payment of termination charges nor they paid any such charges for the termination services received from the appellants. i) Aircel Cellular Ltd. (Aircel Cellular) ii) Tata Teleservices Ltd., iii) Reliance Communicaitons Ltd. and Reliance Telecom Ltd., iv) Loop Mobile (India) Ltd., (Loop Mobile) v) Sistema Shyam Teleservices Ltd., (SSTL) vi) Mahanagar Telephone Nigam Ltd., (MTNL) Proceeding against the appellants were initiated for not paying service tax on the SMS termination services provided by them. Proceedings culminated in the impugned order confirming the demand of service tax of Rs. 4,28,05,261/- under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Point applicable to continuous supply service. In Indian law, he states no such tax point has been introduced. On valuation of the service, he submits that the Commissioner has wrongly applied the provisions of Section 67 (iii) of the Act and Rule 3 of the Valuation Rules. He further contends that the demand letters issued by the appellant cannot be considered as invoice and referred to CBEC Circular No. 166/1/2013 dated 01/01/2013 in this regard. He also argues that if demand is found to be sustainable, they may be granted cum tax benefit. On limitation he refers to their to their letter dated 22/12/2010 addressed to the Directorate General of Central Excise Intelligence in which they had notified that the termination charges are not being charged. 5. The contention of the Ld. AR is that Rule 2(c) of the POT Rule categorises "continuous supply of service" in two categories. Under the second category, once a service, such as the service in question is notified, the point of taxation is governed by Rule 6 (as it stood during the relevant period). Rule 6 provides the point of taxation to be the time when the invoice is issued or if the invoice is not issued within fourteen days of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a notification in the official gazette prescribes provision of a particular service to be a continuous supply of service whether or not subject to any condition". As correctly pointed out by both sides, the definition has two parts. The second part covers those cases of "continuous supply of service" where the Central Government by a notification prescribes a particular service to be a "continuous supply of service". The telecommunication service has been notified as "continuous supply of service" under Notification No. 38/2012-ST dated 20/06/2012. We may now ascertain the Point of Taxation in the present case. Prior to 01/04/2012 the point of taxation was determined under Rule 6. For convenience, the Rule is re-produced below: "6. Determination of point of taxation in case of continuous supply of service; Not withstanding anything contained in rule 3, 4, or 8 in case of continuous supply of service, the point of taxation shall be - (a) the time when the invoice for the service provided or to be provided is issued; Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Banmore Cables & Conductor vs. CCE, Indore - 2012 (278) ELT 503, CCE vs. Jalaram Plastic Pack - 2014 (34) STR 66 to support her case and states that when assessees want to avail Cenvat Credit they are successful in doing so on the basis of certificates/debit notes which gives all the details required in an invoice. We find that in terms of Rule 4A the following details are required in an invoice: i) the name, address and the registration number of such person; ii) the name and address of the person receiving taxable service; iii) description and value of taxable service provided or agreed to be provided and iv) the service tax payable thereon From the demand letters issued by the appellant to various telecom operators, we find that they contained all the details required in an invoice. The demand letters give the name and address of the service provider as well as the service receivers. The description and value of service provided is also mentioned by the appellant in the demand letter. As regards the service tax payable, we are of the view that once the value is known as well as the rate of tax, the actual amount of service tax payable becomes quite obvious. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect from 01/04/2011. The appellant also started charging the operators from 1/4/2011. In some cases, certain operators agreed to sign the Agreements and paid the charges. In the present case the operators neither signed the Agreement nor paid the charges. Therefore, the appellant issued demand letters. It is clearly been brought out in para 23 of the impugned order that the appellant never declared the provision of service rendered or taxable value in the service tax returns filed with the department. Failure to fulfill this legal obligation cast on the service provider, is a case of suppression of facts especially when the appellant had raised demand letters on the service receivers quantifying the charges payable for the services rendered by the appellant. Learned Advocate relied on the Hon'ble High Court of Patna Judgement in the case of Aashirvad enterprises Pvt. Ltd. - 2013 (288) ELT 172 (Pat.). We have seen this judgement. The assessee in this case paid duty at 8% on PVC parts used for manufacture of pumps which were exempted, in terms of Rule 57 CC(1). It declared so in the invoices. But in terms of Rule 57 CC(4) (a), duty was required to be paid at 25%. In this context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall determine the equivalent money value of such consideration which shall in no case be less than the cost of provision of such taxable service. From the above statutory provision, we find that the value has already been ascertained by the appellant. In the circumstances, Section 67 (1) (i) which says that value shall be the gross amount charged by the service provider, would be applicable. In the present case, the appellant has charged the service tax and quantified the same in the demand letters. In our view, invocation of wrong sub-clause for determination of value does not make the charge itself invalid. Reliance is placed on the Apex Court judgement in the case of JK Steel Ltd. Vs. UOI - 1978 (2) ELT J355 (SC) which held that if the exercise of a power can be traced to a legitimate source, the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of the power in question. This is a well settled proposition of law. As the service provider has issued demand letters quantifying the SMS termination charges of Rs. 0.10 per SMS with effect from 01/04/2011 and equivalent charges have been paid by some other telecom operato ..... X X X X Extracts X X X X X X X X Extracts X X X X
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