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2011 (9) TMI 151 - AT - Service TaxService Tax liability under the category of Business Auxiliary Service for sales, purchase of SIM cards - Commissioner (Appeals) has dismissed the appeal only for non-compliance of the Stay Order and not on merits. - appellant directed to deposit an amount of Rs.3 lakhs (Rupees Three Lakhs only) as pre deposit - Ld. Commissioner (Appeals), after ascertaining compliance ordered as above, will restore the appeal to its original number and decide the matter on merits.
Issues: Stay petition for waiver of pre-deposit of Service Tax liability under Business Auxiliary Service category for sales and purchase of SIM cards.
Analysis: The appellant filed a Stay Petition seeking waiver of pre-deposit of an amount of Rs.9,21,091, along with interest and penalty under Section 76, 77 & 78 of the Finance Act, 1994. The issue at hand pertains to the Service Tax liability under the Business Auxiliary Service category for the sales and purchase of SIM cards from BSNL. The Commissioner (Appeals) rejected the appeal due to non-compliance with the Stay Order for depositing the requisite amount. The Tribunal decided to take up the appeal for disposal due to the narrow compass of the issue involved. Upon reviewing the submissions from both parties, the Tribunal noted that the services provided by the appellant might fall under the judgment of the Hon'ble Supreme Court in the case of Idea Mobile Communication Ltd, which held that the sale of SIM cards cannot be considered as services rendered. However, the Tribunal refrained from commenting on the merits of the case and the limitation aspect, as the Commissioner (Appeals) dismissed the appeal solely based on non-compliance with the Stay Order, without considering the merits. It is established law that the Tribunal cannot delve into the merits if not considered by the lower authority. Considering the issue seems to be against the assessee within the limitation period, the Tribunal directed the appellant to deposit Rs.3 lakhs within four weeks and report compliance to the Commissioner (Appeals) by a specified date. The Commissioner (Appeals) was instructed to restore the appeal to its original number and decide the matter on its merits while adhering to the principles of natural justice. Consequently, the Stay Petition and the appeal were disposed of by the Tribunal.
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