TMI Blog2008 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the value of SIM card supplied by the respondent forms part of taxable service on which service tax is payable by the respondent – However, no penalties should be levied. - 20 OF 2006 - - - Dated:- 4-9-2008 - C.N. RAMACHANDRAN NAIR AND V.K. MOHANAN, JJ. Vinod Chandran for the Appellant. P. Sanjay and A. Parvathi Menon for the Respondent. JUDGMENT C.N. Ramachandran Nair, J. - This appeal is filed by the Commissioner of Central Excise and Customs challenging the order of the Custom, Excise and Service Tax Appellate Tribunal, cancelling the demand of service tax on the value of SIM cards sold by the respondent to their mobile subscribers. We have heard Asstt. Solicitor General appearing for the appellant, couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the judgment that the nature of transaction involved in providing telephone connection may be a composite contract of service and sale. It is possible for the State to tax the sale element provided there is a discernible sale and only to the extent relatable to such sale. Since the sales tax authorities under the KGST Act did not show any anxiety to decide the matter after remand by of the Supreme Court, we issued specific direction for compliance with the judgment. Special Government Pleader produced orders of the Asstt. Commissioner of Commercial Taxes, Special Circle, Thiruvananthapuram, wherein he has conceded the position canvassed by BSNL and BPL Mobile services that SIM card has no intrinsic sale value and it is supplied to custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment after remand by Supreme Court has given up the claim for sales tax, the question to be considered is whether the value of SIM cards forms part of taxable service. Admittedly respondent answers the description of telegraph authority defined under section 65(111) of Finance Act, 1994 and they are registered for the payment of service tax and they are in fact remitting tax on activation charges. The exclusion claimed by them is only on the value of SIM cards, that too only on the ground that they are free to supply SIM cards as sale of goods and remitted sales tax thereon. In order to consider whether the value of SIM card constitutes taxable service, we have to examine the functioning of this item in the service provided by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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