TaxTMI 
TaxTMI 
2026 (7) TMI 1941
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....ein the learned Adjudicating Authority has confirmed the demand on Service Tax of Rs.1,13,71,466/- along with interest. He also imposed penalty under Section 75 of the Finance Act. 2. The learned counsel for the Appellant submits that the demand in this case pertains to three issues namely:- 1. Service Tax levied on Interconnection Usage Charges (IUC) 2. Service Tax levied on delayed payment of surcharge collected. 3. Short Payment of Service Tax on public telephones installed for local calls. 3. Learned Counsel submits that all these issues have already been clarified by the Department and they are not paying Service Tax in respect of all the three issues mentioned above. 4. Regarding levy of Service Tax....
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....he services rendered at the departmentally run public telephones for local calls. Accordingly, the Appellant submits that no Service Tax is payable as the said service is clearly exempt from payment of service tax. 7. Learned Authorized Representative reiterated findings in the impugned order. 8. Heard both the sides and perused the appeal records. 9. We find that learned Adjudicating Authority has confirmed the demand of service tax of Rs.1,13,71,466/- in respect of three different categories of services. 10. Regarding the services on the IUC charges, we find that the said services have become a 'taxable service' only after introduction of the Finance Act Bill 2007. As the demand in this case pertains to the period prior 2007, ....
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....bility of IUC has been examined a fresh, in consultation with service providers through the Cellular Operators Association of India. 3. As stated above, the interconnection usage service is provided by one telegraph authority to another telegraph authority. In terms of the existing definition, in the Finance Act, 1994, "telephone service" means any service provided to a subscriber by the telegraph authority in relation to a telephone connection. The subscriber means a person to whom any service of a telephone connection has been provided by the telegraph authority. Therefore, a subscriber in respect of telephone service is the person who avails of service of telephone connection. While providing service of interconnection usage, no....
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....e withdrawn. Pending cases may be decided in terms of this clarification. 6. Trade and field formations may be advised accordingly. 7. Hindi version will follow." 10.1. Thus, by relying on the above Circular, we hold that IUC collected are not liable to service tax during the relevant period and hence we set aside the demand confirmed in the impugned order on this issue. 11. The next issue on which demand confirmed in the impugned order is relation to surcharge collected on delayed payment of telephone bills. We find that the service tax liability on the said issue has already been clarified by Board vide Circular No.32/3/2000-CX dated 20.12.2000. For ready reference, the said Circular is reproduced as under:- ....
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....ed herein. Trade and field formations may also be informed suitably. Receipt of this circular may kindly be acknowledged." 11.1. We find that the said Circular has clarified that no service tax is payable on the surcharges collected for delayed payment of telephone bill. Thus, by relying upon the said Circular, we hold that there is no Service Tax payable on the surcharges collected for delayed payment of telephone bill by the Appellant. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable and hence we set aside the same. 12. Regarding the demand of Service Tax in respect of telephone services rendered by means of local calls made through the public telephone booths installed at Airport....