United Telecoms Ltd. Vs Commissioner of Service Tax (CESTAT Bangalore)
The dispute before the CESTAT Bangalore concerned the service-tax liability of United Telecoms Ltd. on activities undertaken pursuant to a contract awarded by the Government of Maharashtra for setting up computerized facilities in its Road Transport offices for issuing Smart Car Driving Licences and paper learning licences. The work was performed using the Sarathi Web platform made available by the Central Government. The appellants captured applicants’ data and photographs, prepared smart card and paper licences and submitted them to the Road Transport Office for further issuance to the applicants. The appellants were permitted to collect consideration for these activities.
The Revenue took the view that the activities constituted ‘Business Auxiliary Services’ under Section 65 (19) (vi) of the Finance Act, 1994 and issued a show-cause notice demanding service tax of Rs. 5,70,02,726/-. The demand was confirmed by Order-in-Original No. 102/2012 dated 08/08/2012.
On behalf of the appellants, it was submitted that the issue was covered by the decision of the Delhi Tribunal in Smart Chip Ltd. V. CCE – 2013 (31) STR 727 (Tri.-Del.), which was stated to have been upheld by the Madhya Pradesh High Court in 2015 (39) S.T.R. 197 (M.P.) and by the Apex Court in 2015 (39) STR J243 (S.C.). Reliance was also placed on CBEC Circular No. 89/7/2006-ST dated 18/12/2006.
