TaxTMI 
TaxTMI 
2019 (3) TMI 617
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....t was of the view that the said services are subject to levy of service tax under Telecommunication Service. Show cause notices were issued for the periods 1.4.2011 to 30.6.2012 and 1.10.2013 to 30.9.2014 proposing to demand service tax along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed equal penalty besides penalty under section 77(2) of Finance Act, 1994. Aggrieved, the appellants are now before the Tribunal. 2. On behalf of the appellant, ld. counsel Ms. Krithika Jaganath appeared and argued the matter. Her arguments are summarized as under:- 2.1 The present issue pertains to International Inbound Roaming Services provided by VCL to Foreign Telecommunication Operator Companies ('FTOs'), for which consideration is paid by the FTOs to the appellant in convertible foreign exchange. To this extent, the appellant has executed International GSM Roaming Agreements (hereinafter referred to as 'Roaming Agreements') with FTOs overseas for providing their subscribers with roaming facilities during their stay in India. Under International Roaming Facility, a subscriber to a Telecom operator i....
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....i.-Del.) 2.4 The impugned order has observed that the decision of the Tribunal in Vodafone Essar Cellular Ltd. is per incuriam for not considering the Notification No. 36/2007. The impugned order has also relied on Circular No. 90/1/2007-S.T. dated 03.01.2007. The Notification No. 36/2007 stipulated that the services provided to International Inbound roaming subscriber were not liable to service tax for the period from 01.07.1994 to 14.01.2007, and the Circular dt. 03.01.2007 clarified that the international inbound roaming services would be taxable under the erstwhile telephone services from 15.01.2007 onwards. Appellant submits that the Notification No. 36/2007 only stipulated non-taxability of the transaction for the period between 01.07.1994 to 14.01.2007. It did not make any positive stipulation on the taxability of the transaction. 2.5 In any case, the decision of the Tribunal in the appellant's own case was rendered on an in-depth analysis of the facts and the tenets of service tax levy. Under the framework of the Finance Act, 1994, it was held that the service recipient would be the FTO, and therefore the services would be deemed to have been exported. Under such circ....
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....3(iii) would operate for Telecommunication Services and the transaction would be treated as export if the Service Recipient is located outside India. For the period post 01.07.2012 when the POPS Rules were enforced, Rule 3 of the Place of Provision of Service Rules would operate. It stipulates that the location of the service recipient would be the place where services are deemed to have been provided. Since the FTO is the Service Recipient, the transaction must be treated as Export transactions for both periods. 3. The ld. AR Shri B. Balamurugan appeared and argued the matter on behalf of the department. His arguments are summarized as under:- 3.1 He adverted to the definitions contained in Section 65(109a) of the Finance Act, 1994 as well as the taxable service defined under section 65(105)(zzzx) of the Act. He also drew our attention to Notification No. 36/2007-ST dated 15.6.2007. It is argued by him that this is a notification issued under section 11C of the Central Excise Act, 1944 read with Section 83 of Finance Act, 1994 whereby the service tax payable on roaming services provided by a telecom company to an international inbound roaming subscriber is not to be levied f....
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....at consideration as received by the appellant from the person who was on visit in India and was receiving services from appellant as a subscriber of foreign telecom company. The international inbound roamer is not a subscriber of the appellants. The department has proceeded with the view that the actual beneficiary of the service is the inbound roamers and the appellant being a service provider for such international roaming facility, the service would fall within the levy of service tax. In fact, even though the actual beneficiary of the service is inbound roamer, there is no agreement by the appellant to provide service to the actual inbound roamer. The agreement to provide service is between the appellant and the foreign telecommunication company. Thus, for the appellant, the service recipient can only be the foreign telecommunication company and not the international inbound roamer. In case of any difficulty faced by the international inbound roamer he would call the customer care of the foreign telecom company to which he is a subscriber. Thus, as per the agreement, the appellant agrees to provide service to the foreign telecom company and therefore such foreign telecom compan....
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....e Hon'ble High Court had concluded that the circular dated 23.8.2007 makes it explicit that all circulars, instructions and communications issued from time to time stand superseded by the Master Circular. The relevant paragraph is extracted below:- "42. Circular No. 90/1/2007, dated 3rd January, 2007 concerned provision of telephony services to subscribers of international telephone service providers who may be on a visit to India and are availing the inbound roaming services. The said Circular clarified that a telephone connection did not necessarily mean providing a telephone instrument or providing sim card. Even if a number was allocated temporarily to an inbound roamer and used internally it remained a service of a telephone connection. It was clarified that during the period of roaming, "the Indian Telecom service provides telephone service to an international inbound roamer. This service to an inbound roamer is delivered and consumed in India and, therefore, is not an export of service." 43. The said Circular dated 3rd January, 2017 did not deal with telecommunication services involving transfer of electronic data. Then came the Circular No. 96/7/2007-S.T., dated 23rd ....