TMI Blog2018 (4) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... the introduction of the new tax entry, thereby revealing that the new tax entry is an altogether new addition to the taxing scope - the tax liability under BSS is not sustainable for development and supply of contents to the telecom operators. MMR and management consultancy service - reverse charge mechanism - Held that: - It is clear that the appellants have entered into a joint - venture arrangement with shared responsibilities and obligations. The income is credited with common bank account and share d as per the pre - arranged percentage between the two parties - in such arrangement in terms of the said agreement, there could be no service inter-se between parties to the agreement - in this arrangement, there can be no tax liability on the appellant. Tax liability - facility of availing server /web hosting provided by the Foreign Service provider - Held that: - Though, the explanation to BSS gives only inclusive definition of infrastructure support, examining the present context of the support received by the appellant by way of server hosting, we are of the considered view that the same will fall under the overall category of infrastructural support service, which is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ames, SMS, alerts etc. to telecom operators who provided it to the subscribers. The Revenue held a view that the said service is liable to be taxed under the support of business and commerce for the period 01.05.2006 to 31.05.2007. Ld. Consultant submitted that the said service was more specifically covered under the category of development and supply of content as per the ratio laid down by Hon ble Andhra Pradesh High Court in BSNL case - 2012 (25) STR 321 (A.P.). Contesting the finding of the original authority that the said service is liable to be taxed under BSS for the period prior to introduction of the new tax entry, the Id. Consultant submitted that such proposition is against the settled legal position. The BSS tax entry continued to remain without amendment, when the new tax entry for development and supply of contents was introduced. Following the ratio of the decision of the Tribunal in Diebold System (P) Ltd. 2008 (9) STR 546 (2008 - TIOL - 489 - CESTAT - MAD) it is held that such new entries will have validity from that date, when there was no amendment carried out in the old tax entry which was also sought to be invoked for taxing. 3. On the second issue regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afide can be attributed. 7. The Id. AR contested the appeal stating that the contents provided by the appellant to the telecom operators is clearly supporting the business of such operators. The Original Authority examined the defence submitted by the appellant regarding the tax liability under a new tax entry as well as under the old tax entry, BSS. Ld. AR submitted that applying the provisions of section 65 A the original authority arrived a t a correct finding regarding tax liability of the appellant for whole of the period. Regarding the tax liability in pursuance of agreement with M/s. Technology Aided System, Kuwait, the Id. AR submitted that the appellant did pay amount to the said company in pursuance of the said arrangement and the same should be considered as a commission. He supported the findings of the original authority on these aspects. 8. Regarding the server space provided by foreign service provider to host the data base and contents of the appellant on such servers, the Id. AR submitted that it is clearly an infrastructural support service falling under BSS. The appellants business very much depends on such web hosting server space by the owners of the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still be taxed under BSS for the period prior to the introduction of a new tax entry, we note that BSS did not under go any statutory change during the relevant time, when new tax entry was introduced for development and supply of content under Section 65 (36)(c) of the Finance Act, 1994. The Tribunal in Diebold Systems (supra) held that introduction of a new entry for the purpose of levy of tax pre - supposes that it was not covered by any of the pre - existing entries. In other words, in the ever widening spare of service tax addition of an item to the list of taxable services is just an addition and not a subtraction from a pre - existing entry. In the present case, we note that pre - existing entry continue to remain with the same scope and words even after the introduction of the new tax entry, thereby revealing that the new tax entry is an altogether new addition to the taxing scope. Accordingly, we note that applying the ratio of Hon ble A.P. High Court, the tax liability under BSS is not sustainable for development and supply of contents to the telecom operators. 11. Regarding service tax liability on reverse charge basis under MMR and management consultancy, we note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonafideness of the appellant against the demand for extended period as well as for penalty which require ingredients of malafide. Reliance was placed by the Id. Consultant regarding the submission on revenue neutrality, on the decision of the Tribunal in Jet Airways (supra). We have noted that in the said decision the Tribunal recorded as admitted facts that the appellant are using the said facility for the taxable output services. We note that no such categorical assertion can be recorded in the present case. Even otherwise we note that the availability or otherwise of credit on input service by itself does not decide the tax liability of output service or on reverse charge. The tax liability is governed by the legal provisions of applicable during the relevant time in terms of Finance Act, 1994. The availability or otherwise of credit on the amount to be discharged as such tax liability cannot take away the tax liability itself. Further, the revenue neutrality cannot be extended to a level that there is no need to pay tax on the taxable service. This will expand the scope of present dispute itself to decide on the manner of discharging such tax liability. We are not in agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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