2005 (98) ECC 48 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(A)

Shri V.K. Agrawal, Member (T) and Shri P.S. Bajaj, Member (J)

Aircell Digilink India Ltd.

Versus

CCE, Jaipur

Appeal No. ST/16/2003-NB(A)

[Arising out of Order-in-Appeal No. 212 (SN)) CE/JPR-I/2003 dated 12.5.2003 of the Commissioner of Central Excise (Appeals), Jaipur]

ST Order No. 21/2004-NB-A, dt. 11.8.2004, Certified on 2.9.2004

Service Tax

Demand -- Limitation -- Section 76 of the Central Excise Act, 1944 -- Notification No. 12/2003-ST dated 26.6.2003 with effect from 1.7.2003 -- Sale of SIM card by the appellants, who was engaged in providing cellular telephone service, to their subscribers falls within the definition of taxable service -- No benefit of the above-said notification for the period March 1997 to Jan. 2000 can be extended to the appellants.

PRESENT :

Shri K.K. Anand, Adv. for the appellants.

Smt. K.A. Mishra, SDR for the respondent.

Cases Cited :

1. Pushpam Pharmaceuticals Co. v. CCE, Bombay, 2002 (80) ECC 6 (SC)............ [Para 4]

2. Ultra Flax (P) Ltd. v. CCE, Faridabad, 2004 (167) ELT 354 (Tri-Del.)................... [Para 4]

Per : P.S. Bajaj

In this appeal, the appellants have made challenge to the impugned Order-in-Appeal vide which the Commissioner (Appeals) has confirmed the service tax of Rs. 3,28,250 on them with interest and penalty under Section 76 of the Act.

2. We have heard both the sides.

3. The service tax demand has been confirmed against the appellants for having not paid the service tax in respect of the said sale to their subscribers. Whereas the appellants have disputed this demand being not taxable. Therefore, the issue involved is as to whether sale of SIM Card by the appellants, who are engaged in providing cellular telephone service, to the subscribers, falls within the definition of `taxable service' or not. This issue already stands decided against the appellants in case of Escotal Mobile Communications Ltd. v. Union of India & Ors. by the Hon'ble High Court of Kerala by holding that transaction of selling the SIM card to the subscriber is a part of service rendered by service provider to the subscriber and as such squarely falls within the definition of `taxable service'. Therefore, the demand of service tax in respect of SIM card sold by the appellants to their subscribers has been rightly confirmed against them. The Ld. Counsel has, no doubt, made reference to a Notification No. 12/2003-ST dated 20.6.2003, vide which service tax in respect of materials sold by the service provider to the recipient of service, had been exempted, but this notification come into force only on 1st of July, 2003. Whereas in the instant case, the period involved is admittedly prior to that being March 1997 to Jan. 2000. Therefore, no benefit of the above-said notification can be extended to the appellants.

4. Another argument, which has been vehemently put forth by the counsel, is of the limitation. According to the counsel, the demand is time barred as the show-cause notice was issued only on 2.8.2000 whereas the period of demand is March 1997 to Jan. 2000. But from the record, we find that there had been suppression of the material facts by the appellants from the department. They never disclosed that they were not paying the tax on the service on the sale of the SIM cards by them, to their subscribers. In their Return ST-3 forms, no details and mode of computation of the service tax being paid by them during the period in dispute had also been disclosed. This evasion of the service tax by the appellants was detected by the department ultimately. The contention of the counsel that the appellants had been working under the bona fide belief that such service i.e. sale of SIM cards to the subscribers, was not taxable, cannot be accepted. There was nothing on the record to suggest if the appellants ever approached the office of the Service Tax authorities to ascertain the details of their liability to pay the service tax. The ratio of law laid down in Pushpam Pharmaceuticals Co. v. CCE, Bombay, 2002 (80) ECC 6 (SC) : 1995 (78) ELT 401 (SC) and M/s. Ultra Flax (P) Ltd. v. CCE, Faridabad, 2004 (167) ELT 354 (Tri-Del.), referred by the counsel, is not attracted to the facts of the present case. Those cases were under the Central Excise Act and there was material on the record to suggest therein that there was no suppression of the true facts by the assessee from the department. But such is not the position in this case.

5. In view of the discussion made above, we do not find any illegality in the impugned Order-in-Appeal of the Commissioner (Appeals) and the same is upheld. The appeal of the appellants is rejected in the above terms.

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