2014 (8) TMI 142 - AT - Service Tax

Waiver of pre-deposit - Passive Telecom Infra Services - Held that - Tribunal in the case of B.S.N.L. Vs. Commissioner of Central Excise, Jaipur-I 2012 (7) TMI 505 - CESTAT, NEW DELHI held that Passive Telecom Infrastructure Services is more appropriately classifiable under Business Support Service where the present demand is in the Business Auxiliary Service and applicants are paying appropriate service tax after the introduction of business support service w.e.f. 1.5.2006. In view of this, we find that amount of ₹ 95,00,000/- deposited is sufficient for hearing of the appeal against the demand of International Inbound Roaming, Inter Usage Charges, Passive Telecom Infra Services and Credit availed on Customs Cess. Supply of Sim card - Held that - sale of Sim Cards are not sale of goods but services and service tax is leviable as on supply of Sim Cards. Hence, the demand in respect of supply of Sim Cards is rightly made. - the applicants are directed to deposit 50% of the amount in respect of the supply of Sim Cards - stay granted partly.

Summary

Issues: Waiver of pre-deposit of service tax, classification of services, demand confirmation for various services, payment disputes, legal precedents on sale of Sim Cards, applicability of service tax.

Analysis:
1. Waiver of Pre-Deposit: The applicant sought waiver of pre-deposit of service tax, interest, and penalties totaling &8377;4,52,12,710. The Tribunal considered the amounts confirmed for different services and the contention of the applicant regarding payments made for certain services.

2. Classification of Services: The Tribunal analyzed the classification of services such as sale of Sim Cards, International Inbound Roaming, Inter Usage Charges, Passive Telecom Infra Services, and Credit Availed on Customs Cess to determine the appropriate category for taxation purposes.

3. Demand Confirmation: The Tribunal reviewed the demands raised, dropped, and confirmed for each service, considering legal precedents and relevant case laws to ascertain the correctness of the demands made by the Revenue.

4. Payment Disputes: Disputes regarding payments made by the applicant for services like International Inbound Roaming and Passive Telecom Infra Services were examined in light of the classification of services and applicable tax laws.

5. Legal Precedents on Sale of Sim Cards: The Tribunal referenced legal precedents, including decisions by the Kerala High Court and the Supreme Court, to determine the taxability of the sale of Sim Cards as a service rather than a sale of goods, leading to the confirmation of the demand related to the supply of Sim Cards.

6. Applicability of Service Tax: Based on the analysis of legal precedents and the nature of services provided, the Tribunal decided on the waiver of pre-deposit for certain services while requiring a partial deposit for the supply of Sim Cards, in line with the settled legal position on the taxability of such services.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal regarding the waiver of pre-deposit of service tax and the classification and taxability of various services, providing a comprehensive overview of the decision-making process and legal considerations involved in the case.