2019 (1) TMI 508 - AT - Service Tax

Rectification of Mistake - reopening of settled case or not - Held that - In the impugned order, Tribunal has held that extended period and penalty is not sustainable. However, in Para 6.4 a finding was given to the extent that the Appellant shall be liable to penalty under Section 78 to the extent of service tax amount stands confirm. We find that to this extent there is a mistake apparent on record - Having held that penalty is not imposable, it cannot be held that penalty under Section 78 would be restricted to the extent of confirmation of demand. Para 6.4 of the impugned order 91424/17 of CESTAT, is modified - ROM application allowed.

Summary

Issues involved:
1. Sale of sim cards - conflicting decisions on service tax liability and penalty imposition.
2. Demand of service tax on international roaming services.
3. Classification of Business Auxiliary Service and taxability of renting equipment.

Analysis:

Issue 1: Sale of sim cards
The appeal raised concerns over the liability of service tax on the sale of sim cards. The appellant cited various judgments to support their case, highlighting contradictory decisions by different tribunals regarding the invocation of the extended period for penalty imposition. While the demand was limited to the normal period in the impugned order, a penalty was still imposed under Section 78. The tribunal acknowledged the conflicting decisions but upheld the penalty to the extent of the confirmed service tax amount, which was deemed erroneous. The tribunal was urged to consider granting duty benefits and treating VAT as service tax, which was not addressed in the impugned order.

Issue 2: Demand of service tax on international roaming services
The tribunal set aside the demand for service tax on international roaming services provided to individuals entering India. The decision was based on specific circumstances and merits of the case, leading to the demand being deemed unsustainable.

Issue 3: Classification of Business Auxiliary Service
Regarding the classification of Business Auxiliary Service, the tribunal recognized that the service fell under business support services from a certain date and was being discharged by the appellants. However, the tribunal instructed the Adjudicating Authority to review the service tax payments made by the appellant and communicate any deficiencies. The tribunal noted the absence of a specific clause under business auxiliary service covering the renting of equipment, leading to the demand being set aside.

The appellant sought to entertain the Review of Order on Merit (ROM) by referring to relevant case laws. The Authorized Representative contended that the appellant's contentions did not fall within the scope of ROM and considering them would amount to reviewing the tribunal's own order. After hearing both sides and examining the case records, the tribunal acknowledged errors in the penalty imposition and modified the impugned order to reduce the penalty under Section 77 to ?5000.

In conclusion, the tribunal addressed the conflicting decisions on service tax liability, penalty imposition, demand for international roaming services, and the classification of Business Auxiliary Service. The judgment provided clarity on the errors in penalty imposition and modified the order accordingly, ensuring a fair and just resolution of the issues raised in the appeal.