Tribunal Rules SIM Card Sales Taxable, Sets Aside Penalties

The Tribunal waived the pre-deposit requirement and proceeded to hear the appeal, agreeing with the appellant that the sale of SIM cards constituted a transaction of goods attracting sales tax, not 'business auxiliary services'. Citing relevant case law, the Tribunal set aside the penalties imposed under the Finance Act, allowed the appeal, and disposed of the stay petition accordingly.

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Issues:
Dispensing with the condition of Service Tax and penalties imposed under various Sections of Finance Act for the sale of SIM cards as 'business auxiliary services'.

Analysis:
The appellant sought to dispense with the condition of Service Tax and penalties amounting to Rs.1,66,548 imposed for the sale of SIM cards related to BSNL, categorized as 'business auxiliary services'. The Tribunal referred to the decision in R. Venkataramana v. CCE [2008] 16 STT 488 (Chennai-Cestat), establishing that the issue had been settled. Based on this precedent, the Tribunal agreed to waive the pre-deposit requirement and proceeded to hear the appeal with the consent of both parties.

The Tribunal cited the case of South East Corporation v. CCE & ST, [2009] 22 STT 446 (Bang-Cestat), which highlighted that the activity of purchase and sale, such as in this case, falls under 'sale of goods' attracting sales tax, not 'business auxiliary services'. The Tribunal noted that the appellant had paid the full value for the SIM cards to BSNL and sold them with a profit margin, indicating a transaction of goods rather than a service. Consequently, the Tribunal set aside the impugned order and allowed the appeal, thereby disposing of the stay petition and appeal accordingly.

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