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TMI Blog2015 (12) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... ability on the prepaid SIM Cards sold by them to the distributors/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 (herein above reproduced) also do not indicate inclusion in that gross value of any cost towards free distribution made by the service provider. Gross amount paid by the person to whom telecommunication service is actually provided is the amount on which tax liability is to be discharged which would mean that prior to 01.03.2011, the amount received by telecommunication provider from the dealer is the amount received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers, the fact remains that full price of such SIM cards are recovered from the recipient of the services clearly establishing a linkage between service to be provided by the notice to the recipient of such service and gross amount charged for such provision of service in money consideration from them. Thus such gross amount paid by the subscribers for such SIM cards are required to be included in the taxable value for the purpose of levy of Service tax in terms of Section 67 of the Act, read with Section 66 Section 68 of the Act, and that Service Tax is required to be discharged by the notice on such amount paid by the subscribers. 4. The issue is now squarely settled by this bench in appellants own case in appeal no ST/111/09 by a final order dated 28/05/2015. The said order is reported at 2015-TIOL-1173-CESTAT. 5. The issue involved in appellant's own case as cited here-in above in respect of free recharge coupon given to the clients; while issue involved in the case in hand is regarding the free issue of SIM Cards. 6. There is no dissimilarity in the facts. We reproduce the entire Judgment of this Tribunal which is as under. 2. The relevant facts that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 introduction, the Board vide Circular No. 334/3/2011-TRU dated 28.2.2011, has specifically clarified that the said valuation rules will be effective from 01.03.2011 and explanation added to Rule 5(1) of the Service Tax (Determination of Value) Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. (b) the adjustments made by the telegraph authority from any deposits made by the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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 insurance agent from the insurer; (vi) the reimbursement received by the authorised service station, from manufacturer for carrying out any service of any motor car, light motor vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 amount. There are a few elements specified in the Explanation to Section 67, as includible in the value of taxable service. The Revenue has no case that any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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