TaxTMI 
TaxTMI 
2018 (1) TMI 1174
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....of Rs. 2,37,20,350/- was raised for IPLC Charges for the period 01.04.2005 to 31.03.2009 plus service tax leviable on payment of Rs. 14,50,679/- made account of other expenses, which appeared to be taxable under Management Consultancy Services during the period 01.04.2005 to 31.03.2009. Further, the demand of Rs. 45,47,70,587/- was raised on account of alleged suppression of taxable value from the department found on scrutiny of Balance Sheets and ST-3 returns for the period 2005-2006 to 2008-2009. In the show cause notice, dated 29.03.2011, the demand of Rs. 67,28,007/- was raised for the period 2009-2010 on account of telecommunication cost (IPLC) charges. In the show cause notice, dated 17.11.2011, the demand of Rs. 39,86,179/- was raised on account of the telecommunication cost (IPLC) charges and other expenses amounting to Rs. 13,415,713/-. All the three show cause notices were adjudicated by the same adjudication order dated 27.09.2012. In the adjudication proceedings, in respect of the show cause notice dated 19.10.2010, the Ld. Commissioner (A) confirmed the demand of Rs. 1,56,320/- on other expenses incurred by M/s Convergys India P. Ltd. along with interest and imposition....
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.... mark up, he stated that this is not a criteria in deciding the taxability of any service provider. 4. The Ld. Advocate for the appellants submits that the issues raised in this appeal are settled against the Revenue by various judicial pronouncements. On the IPLC charges, he argued that no demand under Business Auxiliary Service was held to be unsustainable this Tribunal in the case of Infosys Ltd. Vs. Commissioner of Service Tax, Bangalore reported in 2015 (37) STR 862 (Tri. Bang.) and it is not the department's case that the overseas entity was holding license under Indian Telegraph Act, 1985. Hence, service tax was not payable for such charges. On the difference of Revenue between balance sheet and ST-3, he submits that being exporter of services they are seeking quarterly refund of service tax and the turnover is certified by statutory auditors as per Circular No. 120 dated 19.01.2010. He also submits that for computing the eligible amount of refund, the Revenue as per the balance sheet and the ST-3 return is reconciled. He relied on the following case laws: (i) Kipps Education Centre, Bathinda Vs. CCE, Chandigarh reported in 2009 (13) STR 422 (Tri. Del.) ....
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....e service provider for a client. I find the services are being provided by the notice to its parent company located outside India and for rendition of those services, parent company has arranged for Communication Link- IPLC link from Sprint, cost of which is reimbursed by Convergys. Hence it is a case that a client is providing service to service provider and not a case where services are being procured for a client and hence the second condition of clause (iv) of Business Auxiliary Service is not satisfied. 14.- Accordingly the services received by the notice in relation to communication link (IPLC) does not merit classification under the category of Business Auxiliary Service being not tenable both on facts and in law as alleged by the department in the impugned show case notice. I also find that it is well settled that once there is a specific entry for an item in the tax code, the same cannot be taken out of that specific entry for an item in the tax code, the same cannot be taken out of that specific entry and taxed under any other entry. In the present case it appears to me that the impugned S.C.N is seeking to discard the specific entry and to bring the noticee'....
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....es but falls under Telecommunication Service. However, in the absence of a licence under Indian Telegraph Act, 1985 for the foreign supplier, demand on this issue is not sustainable. 10. Further, we find that as admitted in the show cause notice which is M/s CMG is only charging the cost paid to the telephone company from the respondent without any mark up, which clearly shows that no extra charges are being collected by M/s CMG for facilitating the connectivity with Sprint Global Services and other vendors. 11. In view of the above, we find no infirmity in the analysis of Ld. Commissioner on the issue of IPLC Charges. 12. On the difference of Revenue between balance sheet and ST-3, we find that the show cause notice has simply taken the difference between ST-3 Return and balance sheet and prepared a table without offering any explanation or basis as to how the demand had arisen for different periods and services. Demands appears to have been calculated the service tax in the show cause notice without doing any investigation or analysis of relevant documents or co-relation with the refunds taken by the respondent. Admittedly, the respondent are eligible for refund of the s....