2020 (6) TMI 345 - AT - Service Tax

Extended period of limitation - penalty - Valuation - inclusion of value of SIM cards sold by the appellant during the period 01.04.2006 to 31.12.2006 - HELD THAT - The issue whether the appellant is required to pay service tax on the value of SIM cards or not has been settled on 04.08.2011 by the Hon ble Apex Court in the case of Idea Mobile Communication Ltd 2011 (8) TMI 3 - SUPREME COURT ; therefore extended period of limitation is not invokable. Admittedly in this case whole of demand is confirmed against the appellant by invoking extended period of limitation - On limitation itself impugned order is not sustainable accordingly the same is set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the extended period of limitation is invokable.
2. Whether penalty is imposable on the appellant.

Issue 1: Extended Period of Limitation
The appellant contested that the extended period of limitation is not invokable and no penalty should be imposed. The demand of ?4,17,269 was confirmed for the inclusion of SIM cards' value sold by the appellant from 01.04.2006 to 31.12.2006. The appellant argued that the issue of paying service tax on SIM cards' value was settled by the Hon’ble Supreme Court in a previous case, and hence, the extended period of limitation should not apply. The Tribunal agreed, citing the Supreme Court's decision, and held that the extended period of limitation is not invokable. As the entire demand was confirmed based on the extended period, the impugned order was set aside on the grounds of limitation.

Issue 2: Imposition of Penalty
The judgment did not specifically address the imposition of penalty on the appellant. The focus of the judgment was on the invokability of the extended period of limitation. The appellant's argument against the imposition of penalty was not discussed in detail, as the Tribunal primarily ruled in favor of the appellant based on the limitation issue. Therefore, the question of whether a penalty should be imposed on the appellant remains unresolved in this judgment.

In conclusion, the Appellate Tribunal CESTAT Chandigarh ruled in favor of the appellant, setting aside the impugned order on the grounds that the extended period of limitation was not invokable. The judgment highlighted the settled legal position regarding the payment of service tax on the value of SIM cards, as established by the Hon’ble Supreme Court in a previous case. The decision provides significant relief to the appellant, allowing the appeal with consequential relief, if any.