2008 (2) TMI 47

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....ber (J)]. - 1. The appellants are cellular phone service providers registered with the department for payment of service tax. They had imported SIM cards and sold the same to their customers on payment of sales tax. They also activated the SIM cards thereby giving connection to the customers (subscribers) who, upon such activation, used cellular phones. The appellants also paid service tax on the ....

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....e of such "goods". Service tax required to be paid only on the activation charges and the same was actually paid. In the circumstances, according to learned Counsel, there was no justification for the demand of service tax on the value of SIM cards. In this connection, learned Counsel relied on the Tribunal's decision in BPL Mobile Communications Ltd. & Ors. v. Commissioner of Central Excise, Mumb....

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....ning the records and considering the submissions, we note that the principle which flows from the judgment of the Apex Court in BSNL's case is that service tax is leviable on services only and not on "goods" on which sales tax has been lawfully levied. A transaction involving sale of SIM cards coupled with activation was considered in the case of BPL Mobile Communications Ltd. (supra). In that cas....

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....2) of the Customs Act. According to this definition, "goods" includes (a)……. (b)……. (c)…….. (d)……. (e) any other kind of movable property. It is not difficult to consider SIM cards to be coming within the scope of "any other kind of movable property". By selling SIM cards on payment of sales tax and by not challenging the levy of this tax, the assessee was also accepting the item a....