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TMI Blog2015 (6) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... ributors/dealers. The sale of such prepaid SIM Cards on the MRP value is undisputed and discharge of service tax liability for services rendered on such sale is also accepted by revenue. It is to be noted that the recharge voucher are distributed free of cost, appellant has not received any amount towards the recharge voucher, though the distributors/dealers have sold the recharge vouchers. In our view distribution of recharge voucher fee of cost to the distributors/dealers would in a way amount to giving commission to the dealer for the transactions of sale of prepaid SIM Cards for the appellant. It can also be noticed that during the relevant period the Explanation as per the Section 67 of Finance Act, 1994 also do not indicate inclusion in that gross value of any cost towards free distribution made by the service provider. - impugned order is unsustainable and is liable to be set aside - Decisions in the cases of BPL Mobile Cellular (2007 (6) TMI 107 - CESTAT, CHENNAI) and Tata Tele Services Ltd. (2015 (4) TMI 80 - CESTAT MUMBAI) followed - Decided in favour of assesee. - Appeal No. ST/111/09 - - - Dated:- 28-5-2015 - Mr. M. V. Ravindran, Member (J) And P. S. Pruthi, Member ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the conclusion that the tax liability arises on the appellant. He would then take us through the provisions of Section 67, as was relevant during the period and submits that the said Section envisages the discharge of service tax liability on gross amount charged by the service provider for the services rendered. It is his submission that the distribution of free recharge voucher was amounting to commission given by them to the dealer; they have already discharged the service tax liability on the amount received from the dealer for the sale of SIM Cards which according to him is not in dispute. He would also submit that the provisions of Section 67 and the Explanation thereof did not include the value of any amount which has been given free of charge. 3.1 He would also take us through the Board's Circular No. 62/11/2003-ST dated 21.08.2003 which would be relevant for the period in question and submit that the said Circular indicates that if the value charged is zero the tax will also be zero even if the service is taxable. Subsequently he would submit that in 2011 the Finance Act was amended and Point of Taxation Rules, 2011 was introduced. Subsequent to such intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t received by them from distributors/dealers for the sale of prepaid SIM Cards; the SIM Cards are sold to the distributors/dealers on MRP and in lieu of the commission payable to them, appellant issues recharge vouchers to that amount which is commission, as free of cost. It is also undisputed that the dealers have recovered the amount as sale of such recharge vouchers from the ultimate subscriber/customer. 6.1 We find that the main issue to be decided in this case is whether during April 2003 to September 2006 distribution of free of recharge voucher attracts service tax liability or otherwise despite the fact that the recharge voucher are given free of cost to the dealers as consideration for commission. 6.2 The provisions of Section 67 during the relevant period are as under:- Section 67 For the purposes of this Chapter, the value of any taxable service shall be the gross amount charged by the service provider for such service rendered by him . (2) .......................... Explanation (1) - For the removal of doubts, it is hereby declared that the value of a taxable service as the case may be, includes, - (a) the aggregate of commission or brokerage charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the inclusion/exclusion of commission, for determining the correct value of the services rendered. We perused the said provisions of Rule 6(1) of Service Tax (Determination of Value) Rules, 2006 and note does not include the Telephone Services by any stretch of imagination. For the brevity sake we reproduce the Rule 6(1) of Service Tax (Determination of Value) Rules, 2006 which would be only relevance for us post 19.04.2006:- Rule 6 (1) Subject to the provisions of section 67, the value of the taxable services shall include,- (i) the commission or brokerage charged by a broker on the sale or purchase of securities including the commission or brokerage paid by the stock-broker to any sub-broker; (ii) the adjustments made by the telegraph authority from any deposits made by the subscriber at the time of application for telephone connection or pager or facsimile or telegraph or telex or for leased circuit; (iii) the amount of premium charged by the insurer from the policy holder; (iv) the commission received by the air travel agent from the airline; (v) the commission, fee or any other sum received by an actuary, or intermediary or insurance intermediary or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the service is taxable. 6.7 In our considered view the ratio of judgement of the Tribunal in the case of BPL Mobile Cellular (supra) on similar set of facts would be applicable. In the case of BPL Mobile Cellular the issue was regarding discharge of service tax on an amount received by the appellant therein for the sale or prepaid SIM Cards to the dealers and distributors; in that case the appellant threrein discharge the service tax liability on actual amount received from the distributors after adjustment of commission payable to them. The Bench recorded as under:- 5 . After giving careful consideration to the submissions, we note that ld. Commissioner (Appeals) misdirected himself by quoting from the text of Section 67 as this provision stood prior to the period of dispute. According to the amended provisions of Section 67, the value of any taxable service shall be the gross amount charged by the service-provider for such service rendered by him. In instant case, the amount charged by the assessee (service-provider) is the amount received by them from dealers/distributors and nothing extra was charged by the appellants. Admittedly, service tax was paid on this amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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