TMI Blog2018 (7) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... alculated by taking MRP as cum tax value in terms of Section 67(2) of the Finance Act, 1994 - demand upheld. Demand of Interest and penalties - extended period of limitation - Held that:- The adjudicating authority has rightly observed noticee to have already been registered with the Department and as such to already been well aware of the provisions of Service Tax, still not disclosing the taxable value of the SIM Cards supplied free of cost to the distributors in their returns nor paying the tax thereupon without seeking any clarification to that effect is sufficiently a positive act which constitutes suppression of facts - the Department was well entitled to invoke the extended period of limitation - demand of interest and penalties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stributor with printed M.R.P. which were subsequently sold by the distributors to the subscribers of the telecom services on the payment of printed value. Non-payment of tax on the said value, the appellant thereby has contravened the provision of Section 67, 68 and 70 of the Finance Act, 1994, read with Rules 6 and 7 of the Service Tax Rules. The said demand of the Show Cause Notice was confirmed vide the order under challenge. Hence, the present appeal. 3. We have heard both the parties at length. 4. It is submitted by the learned Counsel for the Appellant that the services of telecommunication were provided through territorial distributors in as such the relationship between the Appellant and the distributors is on principle to pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, it is submitted by learned D.R. that transaction about distributing 10 free SIM Cards to its distributors is not at all the transaction of charity. It is impressed upon that after the amendment in Section 67 of the Act of 1994 in the year 2007, even non-monetary consideration, but having a true value thereof are to be taken into consideration while assessing the taxable value and that the same is very much in accordance of Rule 3 of Manner of Determination of Value Rules. Learned D.R. has impressed upon that true value, irrespective paid or not shall be the criteria of taxability, accordingly. With respect to the retrospective application of the Amendment in Sub-rule 5 of Determination of Value Rules, it is submitted that the change, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice recipients of the appellant who admittedly is a tele-communication service provider. He is providing same services to the subscribers as he is providing services to the subscribers who had purchased those SIM Cards which were sold by the Appellant to the distributors against the printed price thereupon. 6. We note that initially there was a contention whether the sale of SIM cards is a service activity or sale of goods. (a) The Hon ble Supreme Court, in case of BSNL Vs. CCE (2006) 3SCC 1, held that whether it is a sale or a service would depend on the intention of the dealing parties and the transaction of SIM may involve both the aspects of sale and service, i.e., activation of SIM could be service and value of physical SIM cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service to the tax net and was considered as substantive change thus was held prospective. In this case though the nature of service and its taxability is not in question the point is that the value of the service has been redefined. It is subject of interpretation whether this can be considered as a substantive change or not. To one understanding, it is substantive because it is a change in the parameter to assess value of service from a back period which could not be perceived at all from the main Rule 5(1) to which this explanation was inserted for removal of doubts. 10. In a recent judgment, the Hon ble Supreme Court in case of UOI vs. Intercontinental Consultants and Technocrats ( 2018 (3) TMI 357 SC), has dismissed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to have already been registered with the Department and as such to already been well aware of the provisions of Service Tax, still not disclosing the taxable value of the SIM Cards supplied free of cost to the distributors in their returns nor paying the tax thereupon without seeking any clarification to that effect is sufficiently a positive act which constitutes suppression of facts. We find no infirmity in the said findings, in consequence whereof the challenge to the Show Cause Notice on the ground of limitation also stands falsified. In the given circumstances, the Department was well entitled to invoke the extended period of limitation. As a result of the entire above discussion, the appeal in hand is hereby dismissed. [ Pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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