Interconnectivity usage charges outside service tax where the service is between telegraph authorities, not a direct subscriber connection.

Interconnectivity usage charges were treated as outside the taxable category for the relevant period because, under the Board's circular, such charges represent a service between telegraph authorities rather than a telephone connection service provided directly to a subscriber. The Tribunal followed its earlier decision in the same appellant's case and concluded that IUC was not liable to service tax for the period in question, rendering the demand unsustainable.

---

---

Issues: Whether interconnectivity usage charges were liable to service tax for the relevant period.

Analysis: The issue was governed by the Board's circular clarifying that interconnectivity usage is provided by one telegraph authority to another and that no service of telephone connection is provided directly to a subscriber in such cases. On that basis, the Tribunal treated IUC as outside the taxable category for the period in question and followed its earlier decision in the appellant's own case.

Conclusion: Interconnectivity usage charges were held not liable to service tax for the relevant period, and the demand was unsustainable.

---