TaxTMI 
TaxTMI 
2021 (9) TMI 452
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....ultaneous imposition of penalties, under section 76 and the section 78 of Finance Act, 1994, for failure to discharge tax liability between 18th April 2006 and 16th May 2008 in the first of the show cause notices. We intend to take up this contradiction only if, in the circumstances following, we are obliged to. 2. From the submissions of Learned Chartered Accountant, representing the appellant, it would appear that, of the total demand of Rs. 51,26,09,423, there is no controversy on Rs.38,32,581 which was held to be leviable on some services procured during the period covered by the first show cause notice. In this dispute, there is again no controversy that the appellant, M/s Idea Cellular Ltd (as M/s Vodafone Idea Ltd was known then), did remit Rs. 75,55,74,933 towards 'roaming charges', Rs. 170,60,97,474 towards 'cell termination charges' and Rs. 64,17,94,492 towards 'carrier charges' to overseas telecom operators. Again, in this dispute, there is no controversy that appellant was contractually obliged, in accordance with universal industry practice, to recompense overseas operators. Nonetheless, it is their cavil that the adjudicating authority has contrived an unwarr....
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.... clear from the above that the adjudicating authority has transposed the transactions onto a portion of the definition in Section 65(75) and Section 65(105)(zh) of Finance Act, 1994 without any discussion to identify the appellant as the recipient of the service and, in accordance with the special provisions of Section 66A, the deemed provider of the service for liability to tax. This is an essential requirement considering the manner in which Section 66A has been enacted as a deviation from the general norm in Section 66 of Finance Act, 1994. It would appear to us that the tenor of the various decisions handed down by the Tribunal, and cited by the rival sides, have not been appreciated for the valorous attempts to clarify this much- misinterpreted provision of Finance Act, 1994. It, therefore, devolves upon us to enlighten both disputants and, at the same time, provide ourselves with that steady and unwavering beam within which we will find the resolution to this dispute. 11. After a futile attempt, through a provision in the Service Tax Rules, 1994, to accord a national treatment to services received from abroad that should, in equity, be subject to the same tax t....
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....tion of the sovereign legislature in placing the burden of tax on the recipient of the service. The economic reality of cross-border commercial transfer of goods has been grafted into the tax laws of most countries in near-perfect visualisation of the flows and has evolved as a nearly universal code. The intangibility of services, unfortunately, does not easily lend itself to such a clear perception. Such transnational engagement in services take multifarious forms which are not readily amenable to straitjacketing as 'one rule fits all'; hence, the selective culling of judicial interpretations in a vain attempt to persuade us to adopt respective points of view. Most disputes have stemmed from the single-minded determination to tax by relying upon the Explanation in Section 66A that disaggregates units within the same commercial entity and the refuge sought by assessees in this disaggregation to claim exclusion from taxability. Ignoring these expectations, an analysis of the various decisions points to the convergence of thinking apparent in the judicial interpretations.' in Korean Air v. Commissioner of Service Tax-I, Mumbai [2017- TIOL-3332-CESTAT-MUMBAI]. The nuance of this le....
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....ive intent of including inter-operator servicing within the definition, did not alter the transactional engagement of the licensee with the subscriber. It is to this avatar of 'taxable service' that the submissions of Learned Chartered Accountant incline in portraying the service provided by the appellant, along with those provided to the appellant, entirely, and exclusively, as 'telecommunication service' which is acknowledged as such only when licensed under the appropriate statute referred to Finance Act, 1994. 8. This is the context in which the Tribunal, adjudging the dispute in Vodafone Essar Mobile v. Commissioner of Service Tax, Delhi [2017 (6) GSTL 67 (Tri-Del)], was compelled to take note of the significance of the licencing regime for holding that '7. We have heard both the sides and perused the appeal records. The admitted facts of the case are that the subscriber of the appellant while visiting foreign country continue to receive telecom service using the connectivity provided by roaming partner of the appellant in that foreign country. There is no dispute that the services provided by the foreign telecom Company is squarely covered by the tax entry '....
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....ness auxiliary service' by the overseas telecom operator, the principle that taxability, arising only as provider of 'telecommunication service', does not apply to an overseas entity stands settled irrespective of any alternative within which service tax authorities choose to enforce tax liability. 10. It has been contended by Learned Chartered Accountant, and without contest from Learned Authorised Representative, that this decision of the Tribunal derives felicitous support of legislative intent from the two clarifications, viz., in circular no. 137/21/2011 dated 15th July 2011 and in circular no. 137/21/2011 dated 19th December 2011 of Central Board of Excise & Customs, that identified the service for which 'international private leased circuit' charges were consideration for exclusive use by commercial entities as 'telecommunication service' with no tax consequence in view of the restricted scope for taxing the consideration after a tentative foray at subjecting it to tax as 'support service of business or commerce' from the Explanation for definition of 'infrastructural support service' included therein. This revisit is squarely applicable to 'carrier charges' in the ....
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....ll the activities of PML are carried out in India. Here it is to be noted that Revenue is equating "used" with "performed" though they are directly not stating so. After having used the word "performed" in Rule 3(1)(iii) of Export [of Services] Rules, if the same word is not used and a different word is used in Rule 3(1)(iii) it is obvious that the words are not interchangeable. Further as already explained PML is getting their payment from Western Union located abroad and it is very obvious that the service is used by the person making the payment and not the recipient of money in India who does not make any payment. The Western Union is getting their payment from the person remitting money abroad and hence obviously the services rendered by PML is ultimately used by the person remitting the money from abroad. So we come to the conclusion that the impugned service is used outside India and would qualify as export of services as per conditions laid down in Rule 3(1)(iii) of Export of Services Rules, 2005. These arguments are equally applicable for the period from 1-5-2006, since when the service is classifiable as "Banking and Financial Services", because this service is also speci....