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Issues involved: Taxability of SIM card sale and services, liability under Finance Act, 1994, imposition of penalty.
In the judgment by the Appellate Tribunal CESTAT, New Delhi, the issues revolved around the taxability of SIM card sale and services, the confusion in the telecom sector regarding liability under the Finance Act, 1994, and the imposition of penalties. The matter had reached the Tribunal due to conflicting decisions from various forums before being resolved by the Apex Court in a previous judgment. Appeal No. ST/41 of 2006: In this appeal, the learned Counsel argued that a show cause notice was issued for the period 1997-1998 to 1999-2000. Acknowledging the settled law by the Apex Court, it was agreed that the service tax liability could be confirmed without imposing a penalty in this case. The Tribunal, considering the fair proposition and the journey of litigations, decided to allow the appeal partly, confirming the tax demand with applicable interest but waiving the penalty. Appeal No. ST/292 of 2006: This appeal covered two show cause notices dated 1/12/2005 and 29/12/2005. For the notice dated 1/12/05, the liability was acknowledged for the period from September 2004 to March 2005. It was decided that the appellant should discharge the service tax demand for this period with interest but without any penalty. Regarding the notice dated 29/12/05, covering the period from 1/4/05 to 30/09/05, the appellant was directed to deposit the service tax liability with interest as per the Apex Court decision, with the penalty being waived. Both appeals were allowed, granting relief as indicated against each appeal, with no penalties imposed in either case.
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