2009 (2) TMI 728 - AT - Service Tax

Summary

Issues:
1. Service charge receipt for SIM cards sold
2. Admissibility of Cenvat credit for input service
3. Levy on international roaming charges

Analysis:

Service charge receipt for SIM cards sold:
The appellant contested the levy of Rs. 71,49,132 for service charge receipt towards SIM cards sold, arguing that there should be no Service Tax on the sale of SIM cards based on previous decisions. However, the Tribunal found a lack of clear pleading by the Appellant regarding the allocation of charges between the SIM card and activation. The Authorities justified the levy based on the value of activation charges in the sale proceeds of the SIM card. The Tribunal acknowledged the need for further examination during the appeal hearing to determine the exact nature of the charges.

Admissibility of Cenvat credit for input service:
Regarding the inadmissibility of Cenvat credit amounting to Rs. 10,20,380 for input service, the Appellant provided a certificate of registration indicating an amalgamation with another company. The Tribunal noted that the change of name disputed by the Revenue lacked basis as the Registrar of Companies had issued a certificate supporting the claim. However, the Tribunal deemed it necessary to delve deeper into the nexus between input service and output service during the appeal hearing for a comprehensive assessment.

Levy on international roaming charges:
The third count involved a levy of Rs. 25,52,987 on international roaming charges. The Appellant cited a Board notification exempting roaming charges before a specific date. The Tribunal prima facie agreed with the notification but emphasized the need for a more detailed examination during the proceedings. The Tribunal considered the technical grounds raised by the Revenue regarding the status of the Appellant under the Telegraphs Act.

In an overall assessment, the Tribunal was not entirely convinced to grant a total waiver of pre-deposit. To safeguard the Revenue's interest, an interim measure was imposed requiring the Appellant to make a pre-deposit of Rs. 10 lakhs within a specified timeline. Compliance with this directive would stay the realization of the remaining demand. The Tribunal justified this decision by referring to a precedent set by the Apex Court in a relevant case.

This detailed analysis encapsulates the key issues addressed in the judgment, highlighting the arguments presented by both parties and the Tribunal's reasoned conclusions.