2008 (7) TMI 50

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....ribunal is set aside to the extent whether the SIM card is subject to Sales Tax or service tax.  Appeal to be decided within four months from the copy of this order being made available to the Appellate Authority.  We make it clear that the issue as to penalty is not open for consideration as the same has not been challenged by Revenue before this Court.  Rule made absolute accordingly.  No order as to costs. 2. The appellants are provider of cell phone service.  The appellant filed these appeals against the impugned order whereby while assessing of the Service Tax as provider of telephone service the value of SIM card which was imported on payment of Custom duty, added to the  value of taxable service.&nbsp....

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....in these appeals has already been settled by the Tribunal in the case of M/s RPG Cellular Services Ltd. (supra) relied upon by the appellant.  The Tribunal held as under :- "Learned counsel for the appellants submitted that the imported SIM cards were cleared on payment of Customs duty; that thereby the department recognised the SIM cards to be 'goods'; that the sales tax authorities also recognised the same to be 'goods' and that service tax was, therefore, not liable to be paid on the value 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 valu....

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....und that the assessee had not challenged the levy of sales tax.  Therefore, the Tribunal observed that the transaction had been accepted by them to a sale of goods.  In this view, the Tribunal held that there should be no levy of service tax on the value of the SIM cards.  For reaching this conclusion, the Tribunal relied on the apex court's ruling in BSNL's case.  We find that, in the present case, there is one more factor which goes in favour of the assessee.  The SIM cards imported by them were assessed to Customs duty and this duty was paid by the assessee.  In this process, the department was recognizing SIM cards to be 'goods' as defined under Section 2(22) of the Customs Act.  According to this defi....