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TMI Blog2024 (10) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... ancy Service', Management, Maintenance or Repair Services', 'Telecommunication Services' and 'Transport of Goods by Road Services/Goods Transport Agency Service'. 2.2 During the course of audit and on scrutiny of the records, it was observed that the respondent has, besides other foreign currency expenses, made expenses in foreign currency for receipt of services in the name of "Operating lease charges" claimed to be comprising of Operating charges, Bandwidth Charges, Space segment, Transponder Services etc. On scrutiny of the invoices, it was observed that the service provider namely M/s Intelsat Global Sales and Marketing Ltd located in United Kingdom (hereafter in short 'M/s Intelsat') has provided Transponder Services and for providing said services, the service provider has charged the service recipient in US$. It was also alleged that the respondent has received services in the name of Bandwidth charges, Space segment charges and Transponder charges. The terms "Leased Bandwidth charges/transponder charges/spectrum charges/satellite bandwidth charges are different name for the same thing for teleport. For the respondent, M/s Intelsat is the only foreign satel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the said transponder capacity available on the satellite, they allocate some capacity to each of their customers for a consideration. Whereas, it further appeared that the respondent had been allocated a certain transponder capacity on the satellite of M/s Intelsat and for the said allocation, the respondent is making payments in foreign currency to M/s Intelsat. Whereas, in turn, the respondent is using the said capacity allocated to them for providing their output service to their own customers. Therefore, it appeared that the services received by the respondent i.e. supply/allocation of capacity of transponders on a satellite of M/s Intelsat is operational/ infrastructure support for providing their output service i.e. Teleport service which is rightly classifiable under "Support Services of Business or Commerce" as defined under Section 65(105)(zzzq) of the Finance Act, 1994 and not under "Telecommunication services" as has been claimed by the respondent. Thus, it was imputed that from the definitions of 'Support Service of Business or Commerce' and the nature of foreign currency payments amounting to Rs.26,49,72,124/- made by the respondent to M/s Intelsat, the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also observed that short payment of service tax had already been deposited alongwith interest and therefore, the penalties are not required to be imposed. Hence, the present appeal is filed by the Revenue on the following grounds: (i) that the Adjudicating Authority erred in classifying the said services under "Telecommunication Services"; (ii) that the Adjudicating Authority failed to appreciate the fact that as per schedule 13 of Notes to the financial statement for the year ended March 31, 2011, the company was incorporated on October 6, 2008 with the principal object of inter alia, establishing, setting and operating uplinking hub (Teleport) including any other mode of uplinking & downlinking facility with the accompanying amplification & related processes uplinking TV signals, teleport services etc to provide end-to-end communication needs and video distribution and contribution services within and outside India; (iii) that the Adjudicating Authority also failed to appreciate the fact that as per copies of invoices raised by the respondent to their customers i.e. Taaza Infotainment Pvt Ltd, NDTV, Gujarat News Broadcasters Pvt Ltd, STV Enterprises etc, it is eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gredients for imposition of penalty have been clearly spelt out in the para 7 of the Show Cause Notice as the respondent had intentionally and willfully suppressed the facts of non-payment of service tax on the value of services suppressed by them and accordingly appropriate penalty should have been imposed. 3. Heard both the parties and perused the material on record. 4.1 The learned Authorized Representative appearing on behalf of the appellant-Revenue submits that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. 4.2 The learned AR further submits that the nature of service provided by the respondent cannot be classified as "Telecommunication Service" and appropriately falls under the definition of "Business Support Service". 4.3 The learned AR further submits that the services received by the respondent i.e. supply/allocation of capacity of transponders on a satellite by M/s Intelsat is operational/infrastructure support for providing their output service i.e. Teleport service and therefore, the same is rightly classifiable under "Support Services of Business or Commerce" as defined under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth for broadcasting. 5.5 The ld. Counsel further submits that as per Section 65(105)(zzzx), the telecommunication services provided by telegraph authority are taxable and M/s Intelsat is not covered under the definition of 'Telegraph Authority' as provided by Section 3(6) of Telegraph Act. He also submits that since the M/s Intelsat is not a telegraph authority, hence the telecommunication services provided by M/s Intelsat are not taxable. In this regard, he refers to Instruction F.No. 137/21/2011-ST dated 15.07.2011 and Letter dated 19.12.2011 which clarifies that the telecommunication service is taxable only when it is provided by a person who has been granted a license under Section 4(1) of Telegraph Act. For this submission, he also relies on the on following judgements: * M/s Vodafone Essar East Ltd. vs. Commissioner of Service Tax - 2023 (12) TMI 48 - CESTAT Kolkata * M/s Vodafone Idea Ltd. vs. Commissioner of GST & Central Excise - 2023 (10) TMI 432 - CESTAT Chennai * Effective Teleservice P. Ltd. va. CCE & ST - 2023 (2) TMI 827 - CESTAT Ahmedabad * M/s Qualcomm India Pvt. Ltd. vs. Commissioner of Customs & Central Excise - 2023 (3) TMI 332 - CESTAT Hyderabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. Counsel also submits that the entire demand is confirmed by invoking the extended period of limitation on the ground that the respondent has wilfully suppressed the fact from the department of receiving the transponder services and has not disclosed the correct details in the periodic returns with an intention to evade tax. In this regard, the ld. Counsel submits that as per Section 73(1) of the Act, extended period can only be invoked if the service tax was not paid or levied by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with intent to evade payment of service tax. He further submits that in the present case the extended period of limitation cannot be invoked as there is no willful suppression of the facts and intention to evade tax on the part of the respondent and the issue in the present case involved the interpretation of complex provisions. In support of this submission, he relies on the decision of Allahabad Bench of the Tribunal in the case of M/s Planetcast Media Services Ltd. vs. Commissioner of Central Excise, Noida - 2024 (3) TMI 1101 - CESTAT Allahabad, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended period cannot be invoked. In this regard, he relies on the decision in the case of Commissioner of Central Excise and Customs and Anr. vs. M/s Reliance Industries Ltd. - 2023-TIOL-94-SC-CX. 5.14 He further submits that the department failed in bringing out any evidence or shows any positive act of suppression on part of the respondent. The Respondent continuously exchanged correspondences with the department and provided documents and agreements as and when required by the department and the department was already aware of the facts. The department failed in establishing mala fide on part of the respondent, therefore, the extended period of limitation cannot be invoked. For this submission, he relies on the following Judgements: * M/s Mehta Construction Company vs. Commissioner of Central Excise, Panchkula - 2024 (3) TMI 284 - CESTAT Chandigarh * M/s Goodyear India Ltd. vs. Commissioner of Central Excise and Service Tax, Delhi - 2023 (12) TMI 1009 - CESTAT Chandigarh 5.15 He further submits that even if the respondent is liable to pay service tax on transponder services under 'business support services', they are still eligible to take the credit of the tax paid on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services, radio paging; (ii) fixed telephone services including provision of access to and use of the public switched telephone network for the transmission and switching of voice, data and video, inbound and outbound telephone service to and from national and international destinations; (iii) cellular mobile telephone services including provision of access to and use of switched or non-switched networks for the transmission of voice, data and video, inbound and outbound roaming service to and from national and international destinations; (iv) carrier services including provision of wired or wireless facilities to originate, terminate or transit calls, charging for interconnection, settlement or termination of domestic or international calls, charging for jointly used facilities including pole attachments, charging for the exclusive use of circuits, a leased circuit or a dedicated link including a speech circuit, data circuit or a telegraph circuit; (v) provision of call management services for a fee including call waiting, call forwarding, caller identification, three-way calling, call display, call return, call screen, call blocking, automatic call-back, call answer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices, internet and telecom facilities, pantry and security;] Section 65(105)(zzzq) : to any person, by any other person, in relation to support services of business or commerce, in any manner;" 7. We have examined the agreements between the parties and we find that the transponder service means the supply of satellite capacity to be managed by the customer i.e. the respondent in the present case. M/s Intelsat on some satellite in the space having a certain capacity i.e. transponder capacity and out of the said transponder capacity available on the said satellite, they allocate some capacity to their customers for a consideration. The ld. Commissioner in the impugned order has also examined all the submissions made herein before us by the ld. Counsel for the respondent and after examining all the submissions, the ld. Commissioner has held that the services provided by M/s Intelsat are 'Telecommunication Services' which are not taxable during the relevant period. Here it is pertinent to reproduce the relevant findings recorded by the ld. Commissioner in the impugned order, which are reproduced herein below: "15.8 I find that the noticee has executed an agreement with M/s Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Telegraph Act to be called as Telegraph Authority. It is only because the foreign telecom service provider cannot constitute a telegraph authority under an Indian law that they remain outside the taxability clause of the telecommunication services. 15.12 I find that the SCN propose to classify services received by the noticee under 'Business Support Service'. I find that this is a broader description as it includes number of other activities in its ambit whereas the service obtained by the noticee are expressly covered under 'Telecommunication Services' as noted earlier. Therefore, specific description is to be preferred over general description for classifying a service as per Section 65A(2)(a). I am also in agreement with the contention of the noticee that definition of 'Business Support Service' prior to 08.04.2011 restricts coverage under the definition "operational assistance for marketing". However since the activities are specifically covered under 'Telecommunication Service', there is no need to give any further finding on it. 15.13 I have also perused the judgment passed by Tribunal Delhi relied upon by the noticee notably in the case of Vodafone Essar Mobile Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Support Services of Business or Commerce'; whereas, in the present case the issue is whether the services rendered by the respondent fall under the category of 'Telecommunication Services' or not. 10. We also find that the ld. Commissioner has given detailed reasoning to hold that the impugned services fall under the definition of 'Telecommunication Services' and not under 'Support Services of Business or Commerce' and we do not find any infirmity in that. 11. Further, we find that the entire demand has been confirmed by invoking the extended period of limitation. We also find that the extended period under proviso to Section 73(1) of the Act can be invoked only if the service tax was not paid or levied by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with intent to evade payment of service tax. We find that the department has not established any ingredients which are required to invoke the extended period. 12. We also find that Allahabad Bench of the Tribunal in the case of M/s Planetcast Media Services Ltd. (supra) has held that there has been a dispute in respect of interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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