Customs, Excise and Gold Tribunal - Bangalore
Vallamattam Communications vs The Commissioner Of Central Excise on 12 November, 2007
Equivalent citations: [2008]12STJ429(CESTAT-BANGALORE)
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 69/2006 ST dated 27.3.2006 by which the Commissioner (A) has confirmed Order-in-Original No. 62/2005 ST dated 16.8.2005 confirming Service Tax amount of Rs. 27,437/- and imposing penalty under Section 78 of the Finance Act, 1994. The appellants were acting as dealer of M/s. BSNL under an agreement. They were purchasing SIM cards from the BSNL at an agreed price and were selling the same to the customers at the rate fixed by the BSNL and the difference was the profit of the appellant. Revenue proceeded to levy Service Tax on this activity under the heading of 'Business Auxiliary Services'. The appellants contended that there was only sale of SIM Cards by them and they were also not rendering any other services. While selling the SIM cards, the BSNL discharged Sales Tax, it was contended that the question of levy of Service Tax did not arise. They further contended that as they were dealers and dealing in goods in the form of sale of SIM Cards, there was no services involved for levy of Service Tax. Their plea has been negatived.
2. The learned Counsel submits that the in an identical matter of other dealers, this Bench in the case of South East Corporation v. CC, Cochin by Final Order No. 610/2007 dated 2.5.2007 allowed the appeal. This ratio has been followed in Hindustan Associated Traders and Ors. v. CCE, Cochin by Final Order No. 673-674/2007 dated 7.6.2007. He submits that the issue is covered in their favour and hence, appeal be allowed.
2.1. The learned JDR reiterated the findings given by both the authorities.
3. On a careful consideration, we notice that in an identical situation on similar facts, this Bench in the cited cases allowed the appeals and held that the activity of purchase and sale of SIM cards does not come within the ambit of Service Tax. The findings record ad in Para 2 of the Southeast Corporation (Final Order No. 610/2007 dated 31.5.2007) is reproduced herein below.
2. I have heard both sides in the matter. I am of the considered opinion that the appellants were not carrying on the activity of Business Auxiliary Service. They have purchased BSNL post-paid/pre-paid Cellular Sim Cards and sold the same in the market. They have only received certain amount of profit, which is ultimately a business practice when goods are sold in the market. The issue pertaining to levy of Sales Tax is already before the Apex court. There is no service carried out by the appellants but actually they have done the activity of purchase and sale which comes within the purview of 'sale of goods' and sales tax is attracted. The Commissioner (Appeals)'s finding that the appellant is doing the activity of marketing and distribution of products and it comes within the ambit of Business Auxiliary Service is not correct finding especially, in the light of the appellants having paid full value for the Sim Cards to the BSNL and sold the same on the profit margin. The learned Counsel points out to the correspondence with the BSNL, the appellants had on this issue, and the BSNL had clarified that they had already paid service Tax on the Sim cards sold to the appellants. This also clearly shows that the BSNL had already discharged their burden and there cannot be double taxation in the peculiar circumstances of the case. There is no merit in the impugned order and the same is set aside by allowing the appeal with consequential relief, if any.
Respectfully following the ratio of the above noted judgments, the impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)