2016 (2) TMI 725

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....013 of Commissioner of Central Excise (Appeals), Chandigarh - II, the stay petition is allowed with waiver of pre-deposit and the appeals are taken up for disposal. 2. The appellants are franchisee distributors of products of M/s Bharat Sanchar Nigam Ltd in which capacity they have entered into agreements with the principals for sale of SIM cards, recharge coupons and "top-up" coupons relating to mobile telephony. SIM cards sold to first-time customers require activation after the payments have been deposited with M/s Bharat Sanchar Nigam Ltd all of which are handled through the franchisee distributor. The other two products are sold to existing customers and do not involve any cumbersome procedures. The franchisee distributor is entitle....

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....e marketing/sale of the three products with distinction between them being attributable to customer categorization, the impugned order has dichotomized them differently in terms of taxable service for the SIM cards and in terms of products for the other two and thus contrived to take the former into the tax net. 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 Exci....

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....is no different from the other two products. 8. The rationale for non-leviability of tax in relation to recharge and "top-up" coupons in paragraph 26 in re GR Movers (supra) is as follows: "26. Though the correct procedure for discharge of the service tax liability by the two parties is that the distributors raise bills for commissions that is due to them along with service tax and BSNL takes Cenvat credit of tax paid by distributors for discharging liability on the telecommunication service provided by BSNL, such procedure dos (sic) not result in extra realization of Revenue. Considering the special nature of the impugned activities and the fact that it can be easily verified that full taxable value of the service provided by B....