2026 (4) TMI 693

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e to time demanding service tax. On adjudication, the demands were confirmed with interest and penalty. Hence, the present appeals. 3. At the outset, the learned advocate for the appellant submitted that the basic requirement for the activity of the appellant to qualify as taxable service in terms of definition of 'Telecommunication Service' is the existence of at least 'two persons', namely the service provider and service recipient. However, in the present case, the different offices situated at different circles of the appellant are part of the very same legal entity of the appellant itself and merely operate as cost centres for the purpose of internally assessing the profitability of each centre, therefore, in the absence of distinct service provider and service recipient, no service tax can be levied on the activity of the appellant. Further, it is submitted that the issue is no more res integra and is covered by the judgment of this Tribunal in the case of General Manager, BSNL Cellular Mobile Services vs. Commissioner of CGST & Central Excise: 2019 (25) GSTL 238 (Tri.-Chennai) and Executive Engineer, BSNL vs. CCE & ST, Jaipur: 2019 (25) GSTL 110 (Tri.-Del.). Further, he h....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....network elements for origination, transit or termination of the calls. 2(xi) "Interconnection Provider" means the service provider to whose network an interconnection is sought for providing Telecommunication Services. 2(xii) "Interconnection Seeker" means the service provider who seeks interconnection to the network of the interconnection provider." 6.3 It is also pertinent to note that in the preamble of the TRAI Telecommunication Interconnection Usage Charges Regulations, 2003, the aforesaid TRAI Notification dated 24-1-2003 clarifies the purpose of the notifications, namely :- "... to fix the terms and conditions of interconnectivity between Service Providers, to ensure effective interconnection between different Service Providers and to regulate arrangements amongst Service Providers of sharing their revenue derived from providing telecommunication services, the Telecom Regulatory Authority of India hereby makes the following Regulation." 6.4 The Telecommunication Interconnection Usage Charges (Thirteenth Amendment) Regulations, 2017 were issued by TRAI Notification dated 19-9-2017 in the Explanatory Memorandum to these 2017 Regulat....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... telegraph authority to another to enable the telephone subscribers of these telegraph authorities to connect with each other. Interconnection in technical terms means the commercial and technical arrangements under which service providers connect their equipment, networks and services to enable their customers to have access to the customers, services and networks of other service providers." 6.7 Viewed in this light, Interconnection Usage Charges would only be such charges levied by a service provider on another service provider. This interpretation is further reinforced by the fact that the said Regulations include the definitions of "Interconnection Provider" as a service provider to whose network interconnection is sought and "Interconnection Seeker" as a service provider who seeks such interconnection. 7. From the facts on record, we find that the disputed services pertain to interconnectivity provided by M/s. BSNL, Cellular Mobile Telephone Services (CMTS) Division and M/s. BSNL, appellants herein to their own landline network. Surely, by no stretch of imagination can these two Divisions of M/s. BSNL be termed as two separate service providers for ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t of the corporate entity which is known as M/s. Precot Mills Ltd. It was emphasised that the debit note was issued only to evaluate the performance of Dyeing Unit as each unit is a separate profit centre. In the case laws cited by the Learned Chartered Accountant, the Hon'ble High Court of Calcutta has held that when the club space is allowed to be occupied by any member or his family members or by his guest for a function by constructing a mandap, the club cannot be called as 'mandap keeper' for the purposes of Service Tax. It was held that principally there should be existence of two sides/entities for having transaction as against consideration. In a member's club, there is no question of two sides. Members and Club both are the same/entity. One may be called as principal when the other may be called as agent, therefore, such transaction in between themselves cannot be recorded as income, sale or service as per applicability of the revenue tax of the country. Hence, members club are not liable to pay Service Tax in allowing its members to use its space as mandap. The ratio of the above case law is clearly applicable to the present case. M/s. Precot Mills Ltd. is a Corporate ent....