2015 (4) TMI 80 - AT - Service Tax

Telephone services - whether the respondent is required to discharge the service tax liability on the amount which they have received from the distributors and dealers or on the MRP on which the subscribers purchases Recharge Vouchers and SIM Cards from the distributors or dealers - Held that - According to the amended provisions of Section 67, the value of any taxable service shall be the gross amount charged by the service-provider for such service rendered by him. In instant case, the amount charged by the assessee (service-provider) is the amount received by them from dealers/distributors and nothing extra was charged by the appellants. Admittedly, Service tax was paid on this amount. There are a few elements specified in the Explanation to Section 67, as includible in the value of taxable service. The Revenue has no case that any of these elements is applicable to the appellants. - Decision in case of BPL Mobile Cellular Ltd. 2007 (6) TMI 107 - CESTAT, CHENNAI followed. Revenue filed a Civil Appeal before the Hon ble Apex Court and the Hon ble Apex Court dismissed the Civil Appeal after condoning the delay. The said dismissal is reported at 2008 (1) TMI 817 - SUPREME COURT OF INDIA . As the dismissal of Civil Appeal tantamount to order of Apex Court on the self same issue in favour of the assessee, we have to follow the same; reliance placed by the learned A.R. on the decision of the Apex Court in the case of Idea Mobile Communication Ltd. (2012 (8) TMI 565 - CESTAT, NEW DELHI) may not carry the case of the Revenue any further. - Decided against Revenue.

Summary

Issues: Disputed service tax liability on prepaid services provided by a telecom company.

Analysis:
1. Facts and Background: The telecom company was providing prepaid services to subscribers through prepaid cards and recharge vouchers. The company was discharging its service tax liabilities based on the value derived from the maximum retail price (MRP) of the vouchers and cards. The tax department alleged under-valuation, leading to a show-cause notice and subsequent adjudication.

2. Revenue's Argument: The Revenue contended that the company should calculate service tax liability based on the total amount received from subscribers for the vouchers and SIM cards, including those sold through distributors and dealers. They relied on a decision by the Apex Court in a similar case to support their argument.

3. Respondent's Defense: The respondent argued that a similar issue had been decided in their favor in a previous case before the Tribunal. They maintained that the service tax liability should be based on the amount received from distributors and dealers, as upheld in the previous case.

4. Judgment: The Tribunal analyzed the submissions and referred to the earlier decision in the case of BPL Mobile Cellular Ltd. where it was held that service tax should be levied on the amount received from dealers and distributors. The Tribunal noted that the law prescribed the value of taxable service to be the gross amount charged by the service provider. As the Apex Court had dismissed the Revenue's civil appeal in a similar case, the Tribunal upheld the impugned order, concluding that it was correct, legal, and not flawed. Therefore, the appeals by the Revenue were rejected as lacking merit.