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2017 (12) TMI 1211 - AT - Service TaxSale of SIM cards - demand of service tax - extended period of limitation - Held that - as per the judgment of Honble Apex Court in the Appellants own case viz IDEA MOBILE COMMUNICATION LTD. Vs. COMMR. OF C. EX. & CUS., COCHIN 2011 (8) TMI 3 - SUPREME COURT OF INDIA it was held service tax to be payable - However since the issue was in dispute in many cases before the Tribunal, particularly in Appellants own case in Idea Mobile Communication Ltd. 2012 (8) TMI 565 - CESTAT, NEW DELHI , the tribunal set aside the demands for the extended period - the demands of service tax on sale of sim cards raised by invoking extended period and penalty to that extent is not sustainable against the Appellant. Demand of service tax - International roaming services provided to persons coming to India - Held that - the subscribers are not of the Appellant but of foreign telecom network operator. There is no contract between the Appellant and subscriber of foreign telephone operator. In such case when the service has not been given to any subscriber, the service tax demand cannot be made - demand set aside. Business auxiliary Service - Held that - the services of giving space on towers for erection of antenna, usage of tower rooms for installation of equipments, usage of generator sets etc by the Appellant would fall under the category of Business Support Service - the adjudicating authority shall scrutinize the service tax payment made by the Appellant and shall communicate the deficiency to the Appellant who shall make payment of the same alongwith interest. Penalty - Held that - the Appellant shall be liable to penalty u/s 78 to the extent of the service tax amount stand confirmed. However the penalty u/s 77 is reduced to ₹ 5,000/-. Appeal disposed off.
Issues:
1. Service tax demand on sale of SIM cards 2. Service tax demand on international roaming services 3. Demand under the category of Business Auxiliary Service 4. Recovery of wrongly availed CENVAT credit on education cess of customs duty 5. Imposition of penalties under Sections 77 and 78 of the Finance Act, 1994 Service Tax Demand on Sale of SIM Cards: The appeal challenged a service tax demand on the sale of SIM cards. The appellant cited the judgment of the Hon'ble Supreme Court in a related case and argued that there was no intent to evade tax. The Tribunal, considering previous judgments, held that the demand beyond the limitation period was not sustainable. It directed the re-quantification of the demand within the limitation period and set aside the penalty, following a decision of the Hon'ble Kerala High Court. The demand and corresponding penalty were ultimately set aside. Service Tax Demand on International Roaming Services: Regarding the demand on international roaming services provided to persons coming to India, the Tribunal found that as the subscribers belonged to a foreign telecom network operator, and there was no direct contract with the appellant, the service tax demand could not be upheld. Citing previous tribunal judgments, the demand was set aside. Demand under the Category of Business Auxiliary Service: The demand under the category of Business Auxiliary Service was challenged by the appellant, arguing that the services provided were more aligned with Business Support Service. The Tribunal agreed, directing the adjudicating authority to scrutinize the service tax payments made by the appellant and communicate any deficiencies for payment along with interest. Recovery of Wrongly Availed CENVAT Credit: Regarding the recovery of wrongly availed CENVAT credit on education cess of customs duty, the appellant acknowledged the error and did not contest the payment. The Tribunal noted this and did not find any issue with the recovery. Imposition of Penalties: The Tribunal held that the appellant would be liable for a penalty under Section 78 to the extent of the confirmed service tax amount. However, the penalty under Section 77 was reduced. The appeal was disposed of accordingly, with the pronouncement made on a specific date. This detailed analysis covers the various issues raised in the judgment, outlining the arguments presented by both sides and the Tribunal's findings and decisions on each matter.
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