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2024 (5) TMI 561 - AT - Service TaxLevy of service tax - Business Auxiliary Service - commission received from M/s Vodafone - HELD THAT - This issue is no more rest integra and has been settled by the various decisions of the Tribunal as relied upon by the appellant in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S RAMA SALES AND SERVICES 2018 (3) TMI 556 - ALLAHABAD HIGH COURT the Hon ble Allahabad High Court held that purchase and sale of SIM Cards by franshisee/distributors appointed by telecom companies not leviable to Service Tax under category of Business Auxiliary Service especially when such companies already discharged service tax on gross amount of Such SIM cards and charging any further service tax on same amount would lead to double taxation. Further, in the case of M/S. DAYA SHANKAR KAILASH CHAND VERSUS CCE ST, LUCKNOW 2013 (6) TMI 340 - CESTAT NEW DELHI , the tribunal has held that the activity of purchase and sale of SIM card belonging to BSNL where BSNL 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 distributor for the second time is not called as per Section 65(19) and 65(105) (zzb) of Finance Act, 1994. The impugned order is not sustainable in law and the same is set aside - Appeal allowed.
Issues involved:
The judgment involves the issue of whether the appellant was required to pay service tax under the category of "Business Auxiliary Service" as provided in Section 65(19) of the Finance Act, 1994 on the alleged commission received from M/s Vodafone. Comprehensive details of the judgment: 1. The appellant's appeal was initially dismissed for default under Section 35F of the Central Excise Act, 1944, as made applicable to service tax vide Section 83 of the Finance Act. However, the Hon'ble CESTAT later waived the condition of pre-deposit during the pendency of the appeal. 2. The Ld. Counsel for the appellant argued that the impugned order was not sustainable in law as it was passed without properly appreciating the facts and the law. The appellant never worked with M/s Vodafone, and there was no communication from M/s Vodafone to substantiate the alleged commission. The appellant's activities involved the sale of SIM cards and other products of M/s Hutchison Essar South Ltd., on which service tax had already been paid by the company. 3. The Ld. Counsel further contended that the appellant had their own sales network, sales executives, and dealer network for selling goods. The amount earned from M/s Hutchison Essar South Ltd. was not a commission but rather a margin of profit accrued from the sale and purchase of goods. 4. The issue in question had been settled by various decisions of the Tribunal and the High Court, including the case of Commissioner of CGST & Central Excise Vs. Rama Sales and Services, where it was held that purchase and sale of SIM cards by franchisees/distributors appointed by telecom companies were not leviable to service tax under the category of Business Auxiliary Service. 5. After considering the submissions from both parties and examining the material on record, the Tribunal found that the commission received by the appellant was for the sale of SIM cards and other products of M/s Hutchison Essar South Ltd., on which service tax had already been paid by the company. The Tribunal relied on previous decisions to conclude that the impugned order was not sustainable in law. 6. Therefore, the Tribunal set aside the impugned order and allowed the appeal of the appellant with consequential relief, if any, as per law.
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