2016 (2) TMI 659 - AT - Service Tax

Adjustment of excess amount paid towards demand - Service tax liability on the value of SIM cards sold by the appellant to their mobile subscribers - Held that - Demand of service tax withe interest confirmed - levy of penalty waived - however, credit of excess amount of service tax paid allowed to be adjusted with the demand. - Lower authorities directed to work out the tax liability and the interest thereof and adjust the same against the deposit made and excess amount, if any, be refunded to the appellant. - Decided partly in favor of assessee.

Summary

Issues involved:
Discharge of service tax liability on the value of SIM cards sold to mobile subscribers under Section 65(105)(zzzx) of the Finance Act, 1994.

Analysis:

Issue 1: Service Tax Liability on SIM Cards Sold
The appeal revolved around the service tax liability on SIM cards sold by the appellant to mobile subscribers. The appellant contended that the issue on merits was covered against them by the judgment of the Apex Court in the case of Idea Mobile Communication Ltd. Additionally, the bench's prior order upheld the demand of service tax with interest but set aside the penalties imposed. Upon reviewing the previous order and considering the judgments cited, the Tribunal found that the service tax liability confirmed by the adjudicating authority, along with interest, needed to be upheld. Consequently, the appeal filed by the appellant was rejected on this ground.

Issue 2: Penalties Imposed
Regarding penalties, the Tribunal noted that the penalties were imposed based on an interpretation issue. Citing their own judgment in the appellant's previous case, the Tribunal decided to set aside the penalties imposed by the adjudicating authority. This decision was in line with the interpretation of the law and the precedents established in the appellant's own case.

Issue 3: Adjustment of Deposited Amounts
The appellant had already deposited the amounts with the Revenue, and they requested that the amounts be adjusted towards the demand and interest. The Tribunal acknowledged the legitimacy of this request and directed the lower authorities to calculate the tax liability and interest, adjust it against the deposit made, and refund any excess amount to the appellant. This direction aimed to ensure that the appellant received the appropriate relief based on their payments and the final decision on the tax liability.

In conclusion, the appeal was disposed of with a decision to uphold the service tax liability, set aside the penalties, and provide for the adjustment and potential refund of the deposited amounts. The Tribunal's decision was based on the interpretation of relevant laws, previous judgments, and the specific circumstances of the case.