2012 (12) TMI 37 - AT - Service Tax

Business Auxiliary Services - Held that - There is no service carried out by the appellants but actually they have done the activity of purchase and sale which comes within the purview of sale of goods and sales tax is attracted. The Commissioner (Appeals) s finding that the appellant is doing the activity of marketing and distribution of products and it comes within the ambit of Business Auxiliary Service is not correct finding especially, in the light of the appellants having paid full value for the Sim Cards to the BSNL and sold the same on the profit margin - Impugned order is set aside and appeal allowed itself.

Summary

Issues:
Dispensing with the condition of Service Tax and penalties imposed under various Sections of Finance Act for the sale of SIM cards as 'business auxiliary services'.

Analysis:
The appellant sought to dispense with the condition of Service Tax and penalties amounting to Rs.1,66,548 imposed for the sale of SIM cards related to BSNL, categorized as 'business auxiliary services'. The Tribunal referred to the decision in R. Venkataramana v. CCE [2008] 16 STT 488 (Chennai-Cestat), establishing that the issue had been settled. Based on this precedent, the Tribunal agreed to waive the pre-deposit requirement and proceeded to hear the appeal with the consent of both parties.

The Tribunal cited the case of South East Corporation v. CCE & ST, [2009] 22 STT 446 (Bang-Cestat), which highlighted that the activity of purchase and sale, such as in this case, falls under 'sale of goods' attracting sales tax, not 'business auxiliary services'. The Tribunal noted that the appellant had paid the full value for the SIM cards to BSNL and sold them with a profit margin, indicating a transaction of goods rather than a service. Consequently, the Tribunal set aside the impugned order and allowed the appeal, thereby disposing of the stay petition and appeal accordingly.