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TMI Blog2023 (10) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... le operator network to the appellant's subscribers. The appellant in turn charges their customers for the said services. Therefore, it appeared to the department that the appellant had received services from their foreign telecom operators for international outbound roaming services which appeared taxable under 'Business Auxiliary Service' (BAS). Show Cause Notice was issued to the appellant proposing to demand service tax of Rs.1,19,31,129/- for the period 01/10/2007 to 30/06/2012 along with interest and for imposition of penalty. After due process of law, the adjudicating authority confirmed the allegations in the Show Cause Notice and demanded service tax amount of Rs.1,19,31,129/- along with interest and imposed equal penalty under section 78 of the Finance Act, 1994 (herein after also referred to as FA 1994) and penalty under sec. 77 ibid. Aggrieved by the order the appellant is before the Tribunal. 3. No cross objections have been filed by the respondent- department. 4. Ms. Krithika Jaganathan, learned counsel appeared before us for the appellant and Smt. Anandalakshmi Ganeshram, learned Superintendent (AR) appeared for Revenue. 4.1 The learned counsel for the appellant su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable. 4.2 The learned Superintendent (AR) appearing on behalf of Revenue has relied heavily on the 'Education Guide' 2012 issued by CBEC. She stated that the service provider (appellant) was located within the taxing jurisdiction while providing uninterrupted service to their customers who went abroad with the help of FTO's who were intermediaries. She further relied on the arguments contained in the Minority Order of the judgment of this Tribunal in M/s Vodafone Idea Limited Vs Commissioner of Central Excise and Service Tax, Coimbatore [2023 990 TMI 68 - CESTAT Chennai], in favour of its stand, that the role of the home network (HNO) is nothing but that of an intermediary - in terms of Rule 2(f) of the Place of Provision of Service Rules, 2012 - in the entire scheme for provision of service and that the actual recipient of the service is the international roamer- subscriber. Hence the tax has been correctly demanded. She further reiterated the findings in the impugned order. 5. We have gone through the appeals and have heard the rival parties. The dispute relates to exigiblity of international outbound roaming service. 5.1 The impugned period for which tax has been demanded is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, even though the beneficiary for such service is subscriber of the FTO. Thus, the FTO is the person who is legally entitled to receive the service as per the agreement, even though the beneficiary is the customer of FTO on their visit to India. Therefore, in my view, there is no change of status of the FTO from service receiver to an Intermediary, post introduction of POPS Rules, 2012, when read in the context of the charging section 66B. The FTO who enters into a legal agreement with the appellant, for its customers to receive service during the Customers' visit to India and accordingly obliged to make the payment for such service, and the Appellant agrees to provide the service, is the service receiver. Further, in my considered opinion, the FTO, in the present circumstances cannot be called as an intermediary, but is the actual service receiver, as per the agreement between them and the Appellant, the service provider. The illustration referred to under the Education Guide that the lady who owns the car and leaves at the garage for servicing, later when her chauffer collects the serviced car after making payment on behalf of the lady, cannot be called the service r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceiver. On the same analogy we hold that during international outbound roaming outside the taxable territory the HNO is the service recipient of the services provided by the FTO and not the HNO's subscribers/ customers. The averment of the appellant in this regard hence succeeds. The reliance placed by Revenue on the minority order and Board's 'Education Guide' has been examined by the majority decision in the same judgment and has not found favour for reasons stated therein. 7. Having decided on the service provider and the service recipient, we can now examine the classification of the service being provided. We find that the issue has been examined by a Coordinate Bench of this Tribunal at Chennai in Vodafone Cellular Ltd dated 29/04/2019 (supra) relying on an earlier order of the Tribunal in M/s Vodafone Essar Digilink Ltd dated 30/11/2016 (supra). Relevant portions of the said order which deals with the matter are reproduced below. "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 Operato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity undertaken / provided by the FTO to the HNO is exigible under RCM. The issue as to whether the appellant is liable to pay service tax under RCM on outbound roaming services received from the foreign telecom service provider under the category of 'telecommunication services' was examined by a coordinate Bench of this Tribunal in Vodafone Essar Digilink (supra). Relying on Boards Circular No 137/21/2011 dated 15/07/2011 wherein in the case of leased circuit services covered under 'telecommunication services' it was clarified that since the service provider located abroad, is not covered under the definition given in section 65(109a), the service provided by foreign vendors cannot be taxed under telecommunication service. Accordingly, the Division Bench concluded that services provided by any person who is not a 'telegraph authority' is not liable to discharge service tax either under section 66 or under section 66A of the Finance act 1994. In other words, although the activity of providing cellular / mobile services to a subscriber during 'international outbound roaming' relates to telecommunication service, however the said services provided by any person who is not a 'tele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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