TaxTMI 
TaxTMI 
2022 (8) TMI 104
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....s.1,26,72,490/- as service tax, Rs.2,50,661/- as education cess, Rs.24,555/- as secondary & higher education cess] only as demanded vide the instant four SCNs under Section 73(1) of Chapter V of the Finance Act,1994. (ii) I impose penalty amounting to Rs.1,29,47,706/- (Rs.One Crore Twenty nine lakh Forty seven thousand seven hundred six) only under Section 78 of the Finance Act, 1994. (iii) Under Section 76 of the Finance Act, I impose penalty of rupees two hundred for everyday during which the failure to pay the above tax continues or at the rate of two percent of the tax per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax. However, the total amount of penalty under Section 76 shall not exceed the amount of tax demand as at (i) above. (iv) I impose penalty amounting to Rs.10,000/- under Section 77 of the Finance Act, 1994 for violation of Sections 69 & 70 of the Finance Act, 1994. (v) M/s Computer India, Court Road, Bye Lane, Ranchi- 834001 shall pay interest under Section 75 of the Finance Act, 1994 at appropriate rate for their default of not paying....
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....demand is on the element of five per cent of the face value of the SIM card sold by the appellant. The original authority had studied the transaction adopting the value, commission and tax involving the sale of SIM card of face value Rs. 300/- as follows:- Face value of card Service Tax @ 10.2% Card value as sold to customer Commission to franchisee @ 5% Amount received from franchisee 300 (285+15) 30.06 (29.07+1. 53) [rounded of to 31 331 (300+31) 15 316 (285+31) 6. The appeal has challenged the demand on the basis that if at all an element of service is involved in the distribution of SIM cards procured from BSNL, the same is charged to service tax which is paid by BSNL. The distributors like the appellant receive part of the value of the SIM card, which has suffered service tax. The impugned demand on the commission element included in the taxable value is against the recognized principles of taxation. Moreover the appellant was not engaged in promoting the business of BSNL. BSNL was engaged in rendering telephone service. The appellant is a dealer who received SIM cards at 95% of the taxable value from BSNL and sold it c....
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....the cited final order. The findings recorded in para 2 are 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 a 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....
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.... 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) 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 a 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 same is set aside by allowing the appeal with consequential relief, if any." The above order clearly applies to the facts of the case. Respectively following the rat....
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....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 BSNL to customers is subjected to tax, we are of the view that there is no case to undo decisions already taken by the Tribunal in this regard. A contrary approach will result in a difference in value that is taxed for mobile telecom service according to the decision of the Apex Court in the case of Commissioner v. BPL Mobile Cellular Ltd. - 2011 (24) S.T.R. J175 (S.C.). We also note that this issue has lost relevance for the future because of exemption under Notification 25/2012-S.T.-S. No. 29 for this type of service." 9. As commission system and sale methodology in relation to SIM cards is th....