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2013 (11) TMI 918 - AT - Service TaxDemand of service tax - Inclusion of value of SIM cards in the taxable value of telecommunication services - Held that:- SIM cards/ Recharge Coupons are not “goods” but service and service tax alone can be levied on the supply of such cards/coupons. While considering the case of Vodafone India Ltd. by the hon'ble Bombay High Court, these decisions of the Kerala and A.P. High Court was not brought to the notice of the Court and therefore, the said decision has to be considered as “per incuriam”. In view of the above factual and legal position, we hold that the benefit of Notification NO.12/2003-ST will not be available to the appellant and service tax has to be paid on the gross amount charged for the supply of SIM cards. Therefore, the demand of Service Tax confirmed by the adjudicating authority is sustainable in law and we hold accordingly - Following decision of Commissioner of Central Excise & Customs, Cochin Versus Idea Mobile Communication Ltd. [2008 (9) TMI 292 - KERALA HIGH COURT], THE STATE OF ANDHRA PRADESH Versus M/s BHARAT SANCHAR NIGAM LTD, HYDERABAD [2011 (9) TMI 216 - Andhra Pradesh High Court] - Decided against assessee. What is the rate of tax that should apply, that is, whether the rate prevalent at the time of rendering of the service or the rate prevalent at the time of receipt of payment for the services rendered, especially in a case when payment is received in advance - Held that:- rate of tax that should apply in respect of service tax is the rate prevalent at the time of rendering of the service and not the rate prevalent at the time of receipt of consideration or the rate prevalent on the date of payment of tax as that would create uncertainties. The basic feature of a tax system is its certainty. Therefore, any interpretation that leads to uncertainties should be eschewed - Following decision of Maharashtra Chamber of Housing Industry vs. U.O.I. [2012 (1) TMI 98 - BOMBAY HIGH COURT] - Decided against assessee. Whether the extended period of time could have been invoked for demand of service tax - Held that:- Adjudicating authority has held that only normal period of time would apply in respect of demand of service tax on the gross amount charged as the records of the appellant had been audited by the Department and no suppression could be alleged. If that be so, in respect of application of rate of tax on the balance of talk time available in respect of pre-paid SIM cards/re-chare coupons and the rental advance, the same logic should apply. Therefore, we hold that in respect of these demands also, the normal period of time shall only apply and not the extended period of time. Demand of service tax on the gross amount charged for the supply of SIM cards/re-charge coupons. We also hold that such supply does not constitute supply of goods and the provisions of Notification No.12/2003-ST has no application. We also uphold the demand of differential service tax on advance rentals received and balance of talk time available at the enhanced rates w.e.f. from 13-5-2003 and 10-9-2004. However, the demands shall be sustainable only for the normal period of limitation and the service tax shall be recomputed for the normal period. On such recomputed demand, interest liability would accrue. Penalty under section 76 shall also apply on such recomputed demand.
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