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TMI Blog2023 (11) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... ING, M/S. VINAYAKA AGENCIES, M/S. MAGNUM VISION, M/S. BHOOPALAM MARKETING SERVICES PVT. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX, THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-II AND CCE VERSUS SHRI V.M. NAYAK BENNE [ 2018 (8) TMI 960 - CESTAT BANGALORE] held that when the telecom operators are discharging service tax on the whole MRP value of SIM cards and recharge cards, then there could be no further service tax liability on the persons who are dealing/selling the said SIM cards or recharge cards to the public. Besides, it is also found that the entire demand is barred by limitation also. The impugned order is not sustainable in law and is set aside - appeal allowed. - HON BLE Mr. S. S. GARG , MEMBER ( JUDICIAL ) And HON BLE Mr. P. ANJANI KUMAR , MEMBER ( TECHNICAL ) Shri Jitender Kumar Jindal , Advocate for the Appellant Ms. Shivani , Authorised Representative for the Respondent ORDER Per : S. S. GARG The present appeal is directed against the impugned order dated 20.03.2013 whereby the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the order-in-original. 2. Briefly the facts of the case are that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provided is covered under franchisee service. He also submitted that the entire demand is barred by limitation. He further submits that prior to the impugned show cause notice dated 31.08.2009 was issued alleging that the appellant has provided Business Auxiliary Service to BSNL by sale to its sim cards and received commission therefore. The said adjudication was confirmed the service tax liability. The appeal was allowed and the demand of tax, interest and penalty was dropped and the revenue did not challenge the same before the higher authorities. He further submitted the fact that the appellant is in the business of selling sim cards/recharge vouchers of BSNL was well within the knowledge of the department when the first show cause notice was issued and therefore, the suppression cannot be alleged in subsequent notices issued for the similar facts to invoke extended period of limitation. For this submission, he relied upon the judgement of Hon ble Supreme Court in the case of Nizam Sugar Factory vs. Collector of Central Excise, A.P. 2006 (197) ELT 465 (S.C.). He also submitted that this issue is no more res-integra and has been considered by various benches of the Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iles Ltd.: 2016 (41) TR 311 (Tri.-Mum) vi. My Car Pvt. Ltd. vs. CCE: 2015 (40) STR 1018 (Tri.-Del) vii. CST vs. Sai Services Station Ltd.: 2014 (35) STR 625 (Tri.-Mum) 6. As far as limitation is concerned, the Ld. Counsel for the appellant submitted that the entire demand is barred by limitation because for the earlier show cause notice, the Commissioner finally dropped the demand which was not challenged by the department and the department was aware of the activities of the appellant, and therefore, in view of the judgement of the Hon ble Supreme Court in the case of Nizam Sugar Factory cited (supra), the entire demand is barred by limitation. 7. On the other hand, the Ld. DR for the Revenue defended the impugned order and submitted that on perusal of the agreement and the Sales and Distribution Policy under which the appellant was operating as franchisee/agent of BSNL reveals that the procedure relating to sale and accounting has been decided by the BSNL for their franchisees and that the appellant as franchisee/agent are not carrying out the sale of products/services as per the terms laid down by BSNL in the agreement and the Policy. He further submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h-II vide Final Order No. A/60282/2023 dated 24.08.2023 and after considering the various decisions of the Tribunal, this Tribunal has observed as under. 13. Further, in view of the judgement of Goyal Automobiles cited (supra) which was not challenged by the Revenue before the appellate authority wherein the Tribunal held in Para 6 and 7 as under:- 6. We note that the impugned order has built its foundation on the assumption that appellants render business auxiliary service in relation to SIM cards and hence liable to tax on the commission earned by them. At the same time, the impugned order has considered the commission received as discount on sale of recharge and top-up coupons as not liable to tax following the decision of the Tribunal in Commissioner of Central Excise, Meerut v. Moradabad Gas Service [2013 (31) S.T.R. 308 (Tri.-Del.)]. Our attention has also been drawn to the decisions of this Tribunal in the case of GR Movers v. Commissioner of Central Excise, Lucknow [2013 (30) S.T.R. 634 (Tri.-Del.)] and Daya Shankar Kailash Chand v. Commissioner of Central Excise Service Tax, Lucknow [2013 (30) S.T.R. 428 (Tri.-Del.)]. The Hon ble High Court of Allahabad h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CESTAT Chennai Bench in the case of Kumar Electronics vs. Commissioner of Central Excise, Madurai 2019 (29) GSTL 463 (Tri.-Chennai) wherein identical issue was involved and the Tribunal has held in Para 7 as under:- 7. The first contention of the Ld. DR is that the judgments relied upon by the Ld. Counsel for the appellant pertain to BSNL or other telecom SIM cards and not to recharge coupon vouchers of DTH operators. We are unable to agree with this argument because the logic, on which it was held that no service tax needs to be paid on the commission of the commission agent, is the same in both the cases. Once the service tax has been paid on the M.R.P. no service tax needs to be paid on the commission received by the distributor because it is a part of the M.R.P. If tax is so levied, it amounts to double taxation. This view held by the Tribunal has been upheld by the Hon ble High Court of Allahabad and subsequently followed by the Hon ble High Court of Madras. The present case, though it pertains to DTH operators, stands on the same footing and the logic, in our opinion, should be applied to these cases as well. It is true that the appellant is providing services to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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