TMI Blog2019 (5) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... ax net with effect from 01.06.2007, which includes the activity of international access and use of inbound/outbound roaming facility. When a subscriber of the appellant travels outside India, he will be able to use the mobile network of the Foreign Telecom Operator as per the agreement entered between the appellant and the Foreign Telecom Operator - When the said services fall under the category of Telecommunication Services , the very same activity cannot be subjected to levy of service tax by treating them as Business Support Services . The said service does not in any way fall under the category of Business Support Services, especially when the activity is covered under the definition of Telecommunication Services - Demand set aside. Penalties - service tax with interest paid before issuance of SCN - HELD THAT:- The appellants have paid service tax along with interest much before the issuance of the Show Cause Notice. The Hon ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [ 2011 (9) TMI 114 - KARNATAKA HIGH COURT] has held that when the service tax along with interest is paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rritory of the Foreign Telecom Operator). (c) Services of Development and Supply of Value-Added Content: The appellant received services for supply of content such as cartoons, music videos, ring tones, etc., from foreign service providers such as M/s. Player One Ltd., M/s. Microsoft Corporation Ltd., etc. 3.2 The demands raised in the Show Cause Notice are tabulated and explained by the Ld. Advocate for the appellant as under : Sl. No. Classification of Demand Activity Period Demand (INR) 1. Management, Maintenance or Repair Services Repair of software 2006-07 6,65,241/- 2. Business Support Services International Outbound Roaming Services 2007-09 4,30,258/- 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to 01.06.2007 is unsustainable and requires to be set aside. 3.4.1 The second issue is with regard to the demand of service tax under Business Support Services . The demand has been confirmed on the activity of International Outbound Roaming services received by the appellant from Foreign Telecom Operators abroad. The Department alleges that the Foreign Telecom Operators have rendered Business Support Services to the appellant. The demand under this category is incorrect. The cellular mobile telephone services including provision of access to and use of switched and non-switched networks for the transmission of voice, data and video, inbound and outbound roaming services to and from national and international destinations were introduced as Telecommunication Services with effect from 01.06.2007. Therefore, the very same activity cannot be made liable to service tax under a different heading viz., Business Support Services for the same period. 3.4.2 She relied upon the decision of the Hon ble Apex Court in the case of Union of India Vs. M/s. Indian National Ship Owners Association reported in 2011 (21) S.T.R. 3 (S.C.) to argue that when a spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evi appearing on behalf of the respondent supported the findings in the impugned order. She submitted that the first issue is with regard to the demand of service tax under Management, Maintenance or Repair Services. The Board vide its Circular dated 07.10.2005 has clarified that computer software is leviable to service tax with effect from 09.07.2004 i.e., the day the exemption granted to services in relation to maintenance and repair of computers, computer software and computer peripherals by Notification No. 20/2003-ST was rescinded vide Notification No. 07/2004-ST. The definition of Management, Maintenance or Repair Services contains an Explanation which clarifies that goods includes computer software. The appellants are therefore liable to pay service tax on the online maintenance and repair services of software received by them from the service providers situated outside India. 4.2 The second issue is with regard to the demand under Business Support Services. It is not disputed that the appellants are receiving services of International Outbound Roaming from Foreign Telecom Operators such as M/s. Teleglobe Canada SEC Comfone LT. They have entered into inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the very same issue and held as under : 6. In view of the same discussions and conclusions, we hold that for the period prior to 1-6-2007, the activity of software maintenance provided by the appellant to APEPDCL will not be liable to service tax liability. However, for the period subsequent to 1-6-2007, said activity will definitely be liable to service tax under the management, maintenance, repair services. The impugned order will stand modified to that extent. Considering that the issue has already been in agitation and that periodical show cause notices have been issued to the appellant, issue being one of interpretation, the imposition of penalty under Section 76 on the appellant is hereby set aside. The matter is remanded to the original authority for the limited purpose of calculating the tax liability of the appellant for the said services for the period 1-6-2007 till 31-3-2008. It is clarified that the said tax liability worked out will be payable along with interest. At this juncture ld. Counsel submits that the said tax liability has been already calculated by them and paid along with interest. This aspect will also be verified and confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices, especially when the activity is covered under the definition of Telecommunication Services . 7.2 The Commissioner (Appeals) in paragraph 24 has discussed that the services provided by the Foreign Telecom Operators are in the nature of identification/authentication of customer desirous of having international roaming facility . That these are, in fact, Business Support Services and would not fall under the category of Telecommunication Services. The appellant has submitted that the non-resident service providers (Foreign Telecom Operators) providing signalling services outside India are not holding licence under the first proviso to Sub-section (1) of Section 4 of the Indian Telegraph Act, 1885. These service providers are therefore not a telegraph authority as defined in Section 65(111) of the Finance Act, 1994. Hence, the service provided by the non-resident service providers would not be liable to service tax as Telecommunication Services. The legislature has sought to tax the Telecommunication Services provided only by a telegraph authority . The Telecommunication Services provided by a person other than a telegraph authority is not sought to be taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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