2016 (4) TMI 330 - AT - Service Tax

Liability of Service tax - Commission received from BSNL for the sale of mobile sim cards - Lower authorities taxed the commission under Business Auxiliary Service - Held that - the issue is no more res integra. By relying on the decision of Principal Bench of the Tribunal in the case of Commissioner of Central excise, Allahabad vs. M/s. Capital TV Service Centre 2015 (10) TMI 576 - CESTAT NEW DELHI , the appellant is not liable for service tax on commission received. Hence, the impugned order is set aside. - Decided in favour of appellant with consequential relief

Summary

Issues involved: Service Tax liability on commission received from BSNL for sale of mobile sim cards from April 2005 to December 2008.

Detailed Analysis:

1. Issue of Service Tax Liability: The appeal concerned the Service Tax liability on the commission received by the appellant from BSNL for the sale of mobile sim cards during a specific period. Both lower authorities concluded that the commission received needed to be taxed under "Business Auxiliary Service" based on the franchise agreement between the appellant and BSNL. The Tribunal referred to a previous case where a similar conclusion was reached regarding the service rendered by the appellant to BSNL being covered under business auxiliary service.

2. Legal Interpretation and Precedent: The Tribunal extensively quoted a previous judgment involving the appellant's case, where it was established that the value of SIM cards sold by the appellant to mobile subscribers should not be included in taxable service under the Finance Act, 1994. The case involved a dispute over whether the activation charges should be considered part of the sale consideration of SIM cards. Various appellate authorities and courts were involved in the decision-making process, ultimately leading to the conclusion that the levy of service tax in the case was not sustainable.

3. Decision and Conclusion: Based on the precedent set in the appellant's own case and the legal interpretations provided, the Tribunal found no merit in the Revenue's appeal. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The decision was pronounced in open court, emphasizing the dismissal of the Revenue's appeal based on the established legal principles and precedents.

This detailed analysis of the judgment highlights the key legal issues, interpretations, and conclusions reached by the Tribunal regarding the Service Tax liability on the commission received from BSNL for the sale of mobile sim cards during the specified period.