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2024 (5) TMI 770 - AT - Service TaxLevy of service tax - Business Auxiliary Services - margin / discount / commission received by the appellant for sale of SIM cards - HELD THAT - The very same issue was considered by the Tribunal in the case of M/S. PATWARI ELECTRICALS VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, AURANGABAD 2016 (5) TMI 845 - CESTAT MUMBAI and it was held by the Tribunal that it was mere purchase and sale of SIM cards and the amount earned by the appellant cannot be subject to levy of service tax under Business Auxiliary Services. The Tribunal in the case of MESSRS HARI OM MARKETING VERSUS C.C.E. S.T. -VADODARA-I 2023 (6) TMI 998 - CESTAT AHMEDABAD had considered the very same issue and followed the decision in the case of M/S. PATWARI ELECTRICALS VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, AURANGABAD 2016 (5) TMI 845 - CESTAT MUMBAI . So also, it was observed that the High Court of Aurangabad in the case of COMMISSIONER CENTRAL EXCISE, LUCKNOW VERSUS M/S CHOTEY LAL RADHEY SHYAM 2017 (9) TMI 509 - ALLAHABAD HIGH COURT had set aside the demand upholding the view taken by the Tribunal. The demand cannot sustain. In the result, the impugned order is set aside. The appeal is allowed.
Issues Involved:
The issue involves whether the margin/discount/commission received by the appellant for the sale of SIM cards is subject to levy of service tax under Business Auxiliary Services. Summary: The appellant, an authorized distributor of pre-paid SIM cards for a telecom company, was alleged by the Department to be liable for service tax on the commission received. After a Show Cause Notice and subsequent appeals, the Original Authority confirmed the demand, interest, and penalties. The appellant contended that various decisions had settled the issue in favor of distributors not being liable for service tax on such commissions. The Tribunal considered precedents where it was held that the amount earned by the appellant from the sale of SIM cards does not attract service tax under Business Auxiliary Services. The Tribunal referenced cases such as M/s. Patwari Electricals Vs. Commissioner of Central Excise, Customs & Service Tax, Aurangabad and M/s. Hari Om Marketing Vs. Commissioner Central Excise and Service Tax, Vadodara-I to support its decision. The Tribunal emphasized that the commission received by the appellant was included in the gross sale price of SIM cards, which had already suffered service tax, therefore no separate service tax could be demanded on the commission. The Tribunal also cited judgments from the High Court of Aurangabad and the Hon'ble High Court of Allahabad to reinforce its decision. The Tribunal ultimately set aside the impugned order and allowed the appeal of the appellant, stating that the issue was settled in favor of the assessee based on the decisions cited. Consequently, the demand for service tax was deemed unsustainable, and the appeal was allowed with consequential reliefs, if any, as per law. (Order dictated and pronounced in open court)
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