2018 (8) TMI 555 - AT - Service Tax

Taxability - margin received in the form of discount - sale of Sim Card of Vodafone, a Telecommunication service provider - Held that - The issue is no more res-integra and is decided in the case of COMMISSIONER CENTRAL EXCISE, LUCKNOW VERSUS M/S CHOTEY LAL RADHEY SHYAM 2017 (9) TMI 509 - ALLAHABAD HIGH COURT , where it was held that activity of purchase and sale of SIM card belonging to BSNL where BSNL has discharged the service tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributors for the second time is not called for - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
Interpretation of taxability of margin received from sale of Sim Cards by a telecommunication service provider.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad involved the issue of taxability of the margin received by the assessee from the sale of Sim Cards of a Telecommunication service provider, Vodafone. The Revenue had held the margin to be taxable. The Ld. Counsel for the assessee argued that the issue was covered by previous decisions of the Tribunal and High Court. The Counsel cited multiple judgments in support of their argument, establishing that the issue was not res-integra. The Ld. Deputy Commissioner (AR) representing the Revenue reiterated the findings of the impugned order, highlighting the penalty imposed under Section 78 despite setting aside the penalty under Section 76 by the Ld. Commissioner (Appeals).

Upon careful consideration of the submissions and perusal of records, the Tribunal found that the issue was squarely covered by the various judgments cited by the Ld. Counsel. Consequently, the Tribunal relied on the ratio of the cited judgments to modify the impugned order. As a result, the Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal. The judgment was dictated and pronounced in open court by the Tribunal.