CESTAT Chandigarh: SIM Card Sales Not Business Auxiliary Service

The Appellate Tribunal CESTAT Chandigarh allowed the appeal, setting aside the demand of service tax on the commission received for selling SIM cards to BSNL under the business auxiliary service category. The decision was based on precedents citing that the sale of SIM cards belonging to BSNL, where BSNL had already paid service tax, did not constitute providing business auxiliary services. The Tribunal ruled in favor of the appellants, providing consequential relief.

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Issues: Confirmation of demand of service tax on commission received for selling SIM cards to BSNL under business auxiliary service.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chandigarh involved the appellants challenging the confirmation of demand of service tax on the commission received for selling SIM cards to BSNL under the category of business auxiliary service. The Tribunal referred to a previous decision in the case of Daya Shankar Kailash Chand, which was upheld by the Hon'ble High Court of Allahabad. The Tribunal noted that the issue before the Supreme Court in the case of Idea Mobile Communication Ltd. was different from the present case. The Tribunal highlighted a decision in the case of Martend Food & Dehydrates Pvt. Ltd., where it was held that the purchase and sale of SIM cards belonging to BSNL, where BSNL had already paid service tax on the full value of the SIM cards, did not amount to providing business auxiliary services. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants, providing consequential relief.

In conclusion, the appeal was allowed by the Appellate Tribunal CESTAT Chandigarh based on the precedents and decisions cited, ultimately ruling in favor of the appellants and setting aside the demand of service tax on the commission received for selling SIM cards to BSNL under the business auxiliary service category.

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