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2016 (2) TMI 608 - CESTAT NEW DELHI

2016 (2) TMI 608 - CESTAT NEW DELHI - 2016 (43) S.T.R. 400 (Tri. - Del.) - Demand of service tax on the value of SIM cards while rendering “telecommunication services” between September 2002 and March 2006 - Held that:- SIM cards do not have a function other than as a service unextricably linked to the activation thereof which is itself acknowledged as a taxable service. - The appellant’s contention in the grounds of appeal that discharge of VAT obligation to the state government will relieve th .....

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malgamation of an entity with appellant will not suffice for the purpose of Rule 9(2) of CENVAT Credit Rules, 2004 without evincing place of receipt of input service as the place pertinent to supply of output service. The claim of the appellant fails rendering the order of the original authority unassailable on this count. - Taxability of charges on roaming facility availed by customers of overseas service provider while in India - Held that:- the tax was not being collected and paid into th .....

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15 - Dated:- 29-10-2015 - MR. JUSTICE G. RAGHURAM, PRESIDENT AND MR. C J MATHEW, MEMBER (TECHNICAL) For the Petitioner : Shri B.L. Narsimhan, Advocate For the Respondent : Shri Amrish Jain, Addl. Commissioner (AR) ORDER PER: C J MATHEW: M/s Bharti Tele-Ventures Ltd, Ambala is before us contesting order-in-original no 05/Commr/PKL/2008 dated 19th September 2008 of Commissioner of Central Excise, Panchkula, which has confirmed tax of ₹ 71,49,132/- as being amount not paid on the value of SIM .....

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hereon and also imposed penalties under section 78 of Finance Act, 1994. 2. In relation to tax on the value of SIM cards, the appellant had submitted before the original authority and cited as ground of appeal the decision of the Hon ble Supreme Court in Bharat Sanchar Nigam Ltd v Union of India [2006(2) STR 161 (SC)] while asserting that the discharge of VAT/sales tax on the value of the SIM card renders it outside the pale of taxability under a Central Act. It may be noted at the outset that, .....

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sion that service tax is payable inasmuch as SIM Card has no intrinsic sale value and it is supplied to the customers for providing mobile service to them. It should also be noted at this stage that after the remand of the matter by the Supreme Court to the Sales Tax authorities the assessing authority under the Sales Tax Act dropped the proceedings after conceding the position that SIM Card has no intrinsic sale value and it is supplied to the customers for providing telephone service to the cu .....

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tted and paid that would not absolve them from the responsibility of payment of service tax, if otherwise there is a liability to pay the same. If the article is not susceptible to tax under the Sales Tax Act, the amount of tax paid by the assessee could be refunded as the case may be or, the assessee has to follow the law as may be applicable. But we cannot accept a position in law that even if tax is wrongly remitted that would absolve the parties from paying the service tax if the same is oth .....

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tax on the activation. The appellant also accepts the position that activation is a taxable service. The position in law is therefore clear that the amount received by the cellular telephone company from its subscribers towards SIM Card will form part of the taxable value for levy of service tax, for the SIM Cards are never sold as Page 12 of 14 goods independent from services provided. They are considered part and parcel of the services provided and the dominant position of the transaction is t .....

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aforesaid position that no element of sale is involved in the present transaction. 3. The appellant s contention in the grounds of appeal that discharge of VAT obligation to the state government will relieve them of tax liability under Finance Act, 1994 is, therefore, not tenable. 4. The original authority has disallowed CENVAT credit on the ground that credit availed relates to invoices that do not pertain to the appellant. He has relied upon Rule 4A of Service Tax Rules, 1994 which is require .....

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f the erstwhile entities that were merged with that of the appellant. Certificate of Amalgamation of the transferor, M/s Bharati Cellular Services Ltd with the appellant dated 9th June 2005 was produced by the Learned Counsel for appellant. He has also cited the decisions of this Tribunal in Showa India (P) Ltd v Commissioner of Central Excise, Faridabad [2012 (275) ELT 128 (Tri-Del)], Lanco Industries Ltd v Commissioner of Central Excise, Tirupati [2008 (223) ELT 550 (Tri-Bang)], Commissioner o .....

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rew attention to the Rules cited in the impugned order which do not allow for any flexibility in relation to certain material particulars. Undoubtedly, the amalgamated entity comprised many erstwhile units which may have accumulated credit in the course of their earlier existence. Nevertheless, the onus vests on the claimant of credit to evidence the receipt of such services at such premises as are pertinent to the taxable services being rendered. Goods permit a certain ease of ascertainability .....

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stomers of overseas service provider while in India is, according to the impugned order, restricted to a telegraph authority which the appellant apparently is not. Notification no 36/2007-ST dated 15th June 2007 under section 11C of Central Excise Act, 1944 provides that tax on charges received for service provided by a telegraph authority to an international in-bound roaming subscriber between 1st July 1994 and 14th January 2007 need not be paid if it has not been so done. Telegraph authority h .....

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