2008 (1) TMI 255 - AT - Service Tax

SIM cards sold by the assessee revenue submits that sale of SIM cards is only incidental to a Telephone service (taxable service) being provided by the assessee and therefore, service tax is leviable and sales tax is not - held that assessee, having paid sales tax on SIM card value, were not liable to pay service tax on such value - grant waiver of pre-deposit and stay of recovery in respect of the service tax and penalty

Summary

The Appellate Tribunal CESTAT, CHENNAI ruled in favor of the appellants, waiving the demand of service tax of over Rs. 1.80 crores for the periods 1995-98 and March 2004 to February 2007. The tribunal noted a contentious issue regarding the sale of SIM cards and held that since the appellants had paid sales tax on SIM card value, they were not liable to pay service tax on such value. The waiver of pre-deposit and stay of recovery for the service tax and penalty amounts demanded by the Commissioner were granted.