2013 (6) TMI 369 - AT - Service Tax

Sale of SIM Cards - bonafide belief - Held that - Considering above fair proposition of appellant and also looking to the journey the litigations have traveled to reach to the finality, it would not be proper to impose penalty for disputed question of law involved in the appeal. Accordingly, this appeal is allowed partly confirming the tax demand followed by interest to be payable as that shall be applicable during relevant time waiving the penalty imposed in adjudication.

Summary

Issues:
1. Taxability of SIM card sale and services.
2. Liability under Finance Act, 1994.
3. Imposition of penalty for disputed questions of law.

Analysis:
Issue 1: The appeals revolved around the taxability of SIM card sale and services. The appellant faced confusion due to conflicting decisions in the telecom sector before the matter reached the Apex Court for resolution. The appellant contended that there was no suppression of facts and had discharged tax liability based on a conceivable basis. The Tribunal considered the journey of litigations and decided to confirm tax demand with interest, waiving penalties.

Issue 2: In appeal No. ST/41 of 2006, the show cause notice was issued for the period 1997-1998 to 1999-2000. The learned Counsel acknowledged the settled law by the Apex Court regarding service tax liability and proposed that tax liability be confirmed without imposing penalties. The Tribunal agreed, allowing the appeal partly by confirming tax demand with applicable interest, while waiving penalties.

Issue 3: Regarding appeal No. ST/292 of 2006, covering two show cause notices, the appellant was directed to deposit service tax liability with interest for the respective periods mentioned in the notices. The Tribunal accepted the fair proposals made by the learned Counsel, directing the appellant to discharge service tax demand for specific periods without penalties but with applicable interest rates as per the relevant time. Both appeals were allowed, granting relief by confirming tax demands and interest, while waiving penalties as proposed by the appellant's Counsel.