2024 (4) TMI 676

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....Assistant Commissioner, Central Excise Division, Sangrur, which was duly sanctioned in favour of the appellant on the receipt of the letter bearing Ref. No. SDE/MOB/SRR/OM P KIDAR N/5 dated 24.12.2005 issued by the Divisional Engineer, Bharat Sanchar Nigam Ltd, Office of GMTD, Sangrur addressed to the Superintendent, Central Excise Range, Sangrur in response to their office letter bearing C.No. CE-IVRfd/OP/06/sng/05/2192 dated 28.11.2005. Thereafter, the appellant surrendered their Registration Certificate vide their office letter dated 25.05.2006 addressed to the Superintendent, Central Excise Range, Sangrur. Thereafter, a Show Cause Notice dated 21.10.2010 was issued to the appellant by the Commissioner, Central Excise Commissionerate, Chandigarh-II calling upon them to show cause as to why Service Tax amounting to Rs.65,21,026/- (Service Tax Rs.63,39,412/- + Edu. Cess Rs.1,26,789/- and H&S Edu. Cess Rs.54,825/-) be not demanded and recovered from them under Section 73 of the Finance Act, 1994 by invoking the extended period of limitation along with interest under Section 75 of the Act and further penalty under Section 76, 77 & 78 of the Act be not imposed. It was proposed to rec....

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....ion. 4.3 He further submits that the Divisional Engineer, BSNL, Sangrur vide his letter dated 24.12.2005 addressed to the Superintendent, Central Excise Range, Sangrur has clarified that BSNL collects the service tax on the sale of Prepaid SIM Cards/Recharge Coupons of mobile connections from Om Parkash Kedar Nath, Distributor, Sangrur as per the rule applicable on gross amount and on the maximum market price inclusive of their commission of SIM Cards/Recharge Coupons. 4.4 He further submits that this issue is no more res integra and has been settled by the various benches of the Tribunal in favour of the assessee and for this, he has relied on the following decisions: a) M/s S.R. Medical Agencies Vs Commissioner of Central Excise, Chandigarh-II vide Final Order No. A/60282/2023 dated 24.08.2023 - CESTAT Chandigarh b) M/s Lovely Traders Vs CCE & ST, Rohtak vide Final Order No. 60094/2023 dated 18.04.2023 - CESTAT Chandigarh c) M/s Devangi Communications, Devangi Complex Jail Circle, Shimoga & Others vide Final Order No's. 21144-21158/2018 dated 16.08.2018 - CESTAT Bangalore d) Commissioner of Central Excise, Meerut Vs Moradabad Gas Service - 2013 (31) S.T.R. 308 (Tri.....

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....s not suppressed any material facts from the department with intention to evade service tax. In this regard, reliance is placed upon the following decisions: * Collector of Central Excise Vs. Chemiphar Drugs & Liniments - 1989 (40) ELT 276 (SC). * M/s Padmini Products Vs. Collector of Central Excise - 1989 (43) ELT 195 (SC). * M/s Pushpam Pharmaceuticals Company Vs. Collector of Central Excise, Bombay - 1995 (78) ELT 401 (SC). * M/s Tamilnadu Housing Board Vs. Collector of Central Excise, Madras - 1994 (74) ELT 9 (SC) 4.7 The learned Counsel further submits that the question of demand of interest and imposition of penalty does not arise as the demand of service tax itself is not sustainable. 5. On the other hand, the learned AR for the Revenue reiterates the findings of the impugned order and submits that the service tax has rightly been demanded on the appellant as the appellant has received commission from BSNL which is liable to service tax. The learned AR tries to distinguish some of the decisions relied upon by the appellant cited supra and also submits that the Department has filed appeal against the decision of the Tribunal in the case of Dyal Medicos vs. CCE & ST,....

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....haser of other cards, is collected from the customer and deposited to Government account by the principal. An attempt has been made to catalogue the various activities that devolve on the appellants in relation to activation of SIM cards without appreciating the fact that the SIM cards are marked with an MRP on which tax is collected in full from the customer. Therefore, the commission paid to appellants is also included in the value on which tax has been collected from the customer. The customer is, consequently, the recipient of the full value of services from none other than M/s. Bharat Sanchar Nigam Ltd.; thus, it is no different from the other two products." 14. Further, we find that this Tribunal in the case of M/s Devangi Communications and others vs. Commissioner of Service Tax, Mysore vide Final Order No. 21144-21158 of 2018 dated 16.08.2018 held that when the telecom operators are discharging service tax on the whole MRP value of SIM cards and recharge cards, then there could be no further service tax liability on the persons who are dealing/selling the said SIM cards or recharge cards to the public. The ratio of decision in the case of GR Movers cited (supra) has been....