TMI Blog2020 (2) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellant is liable to pay service tax on the services provided to the other ISPs through NIXI, and they have raised invoice for such services provided, on NIXI, and have also admitted to pay service tax. Registry is directed to put up this matter before the Hon ble President for referring it to the ld. third Member for his opinion. - Service Tax Appeal No. 50007/2016 - Interim Order No. 2/2020 - Dated:- 13-2-2020 - Hon ble Mr. Anil Choudhary, Member (Judicial) And Hon ble Mr. C L Mahar, Member (Technical) Present for the Appellant: Shri Puneet Agarwal, Advocate Present for the Respondent: Shri R K Majhi, AR ORDER PER C L Mahar: The brief facts of the matter are that the appellant is a public sector undertaking engaged in the business of providing various kind of telecommunication and IT related services including internet telecommunication service. The appellant primarily having two circles for the operation purpose one is based in Delhi and another is based in Mumbai and adjoining areas. The Department has entertained a view that the appellant have entered into a bilateral domestic private pearing arrangement with other internet service p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t traffic. Hence it is further been impressed that prior to 1st April, 2012 since there have not been any incidence of issue of invoice either for debit or credit note nor there has been any revenue receipt for this purpose. it is, therefore, wrong on the part of the department to allege suppression of facts or non payment of service tax in contravention of any provisions of Finance Act, 1994. The learned advocate has admitted that a bill dated 09.10.2013 was issued by the appellant on M/s. NIXI asking for payment of ₹ 7,44,19,477/-. However, the payment for the same has not been received by them as yet from M/s. NIXI. It is vehemently argued that it is wrong on the part of the Department to allege that the appellant have fraudulently, or by mis-declaring or by suppressing the relevant facts evaded Service Tax as the appellant is a Public Sector Undertaking and, therefore, no malafide can be attributed even if no service tax has been paid for pearing arrangements. The elements of fraud, suppression or willful mis-representation with an intent to evade Service Tax cannot be alleged against a Government of India undertaking. The fact of the matter is that coordinating agency in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the definition of internet telecommunication service provided under section 65(57 a) of the Finance Act, 1994. It is to mention here that Internet Telecommunication Services came into effect with effect from16.05.2008. The relevant section provides as under: (57a) internet telecommunication service includes,- (i) Internet backbone services, including carrier services of internet traffic by one Internet Service Provider to another Internet Service Provider, (ii) Internet access services, including provision of a direct connection to the internet and space for the customer s web page, (iii) Provision of telecommunication services, including fax, telephony, audio conferencing and video conferencing, over the internet. As per section 65(56b) internet means a global information system which is logically linked together by a globally unique address, based on Internet Protocol or its subsequent enhancements or upgradations and is able to support communications using the Transmission Control Protocol or Internet Protocol suite or its subsequent enhancements or upgradations and all other Internet Protocol compatible protocols. As per Section 65(105)(zzzzu), taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name known, is received by the service provider towards the provisions of taxable service, the point of taxation shall be the date of receipt of each such advance. 6. A glance at the above mentioned provisions make it abundantly clear that liability to pay service tax arises from the date an invoice is raised by the service provider to the service recipient. The fact of the matter is that the invoice in this case had been raised on M/s. NIXI on 10.09.2013 post Point of Taxation rules came into force. Hence the relevant date for payment of service tax becomes the date of invoice, and therefore, in our considered view, the service tax is payable by the appellant since the date of issue of invoice. 7. In view of the above discussion, we hold that so far as the liability of payment of service tax amounting to ₹ 70,93,529/- along with interest as per the provisions of section 73 and 75 of the Finance Act, 1994 is certainly leviable on the appellant. We, therefore, do not find any shortcomings or legal inconsistency in the impugned order in original and we uphold the order in this regard. 8. Coming to the grounds of appeal regarding the imposition of penalty under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a State Govt. owned Corpn. would try to evade the payment of duty by resorting the wilful suppression of facts - more so when the duty paid was to be reimbursed to them by the Govt. In view of these circumstances, we are of the view that the Appellant's sugar mills cannot be accused of suppression of facts and therefore, neither the provisions of Section 11AB nor the provisions of Section 11AC would be attracted. 5. In view of this, we, while confirming the Commissioner (Appeals) s order, upholding the duty demand, set aside the portion of the order ordering interest on duty under Section 11AB and imposing penalty under Section 11AC. The Commissioner s (Appeals) order stands modified as above. 9. In view of entire above discussions, we hold as follows: i) The order-in-original so far as the confirmation of the service tax amounting to ₹ 70,93,529/- is concerned, it is legally correct and we do not interfere with the same; ii) So far as the imposition of penalty under section 78 is concerned, we set aside the same; iii) Do not interfere with the rest of order-in-original. 10. The appeal is accordingly, decided in view of the above. (pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased line (or any other connecting medium such as Radio link, VSAT, Fibre, ATM Frame relay etc.) to the NIXI network as per the technical requirement s of NIXI. Be solely responsible for all charges (including insurance, maintenance, repairs, configuration, operation, etc.) related to the Members Equipment. Provide 24x7 operational contact details for the use of NIXI staff Ensure that its usage of the connection/NIXI s network is not detrimental in any way and does not cause damage to the NIXI network/infrastructure or to the usage of NIXI by the other members or to the traffic exchange thereon Insure its equipments (including 3rd party insurance) while it is in the NIXI racks. not to hold NIXI responsible for the content of its traffic being transmitted through NIXI network/exchange. be solely responsible for member s own violation of the condition of its ISP license issued to it by the Department of Telecom, under which ISP is authorised to provide Internet services and connect to or through NIXI. 15. Peering is the arrangement of traffic exchange between Internet service providers (ISPs). Larger ISPs with their own networks agree to allow traffic from othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, NIXI has adopted a multilateral peering policy. Member ISPs shall not refuse to accept traffic from other members. Further, NIXI, in the agreement, represents that it possesses a valid authority granted by the Department of information Technology, under Ministry of Communication and Information Technology, Government of India to act as a neutral Internet exchange facilitating for the ISPs to interconnect with each other for efficient routing of domestic tariff. (emphasis supplied) 17. Further, the traffic policy for Traffic Exchange at NIXI node between ISP A and ISP B, B will pay to A (through NIXI) an amount equal at the specified rate per Gbyte x (traffic from A to B minus traffic from B to A). Here, the concept of Requester Pays to promote domestic content. Thus the Requested traffic from ISP A to ISP B is measured and subtracted from the requested traffic from ISP B to ISP A. Under the scheme, settlement of the payment between the two service providers was to be done by paying the money to NIXI and NIXI paying the net of all such settlements to the respective ISP. Further, in case of a NIXI Member- ISP, providing transit to another NIXI Member, where the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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