The sale of SIM cards does not amount to providing business auxiliary services if Service Tax has already been discharged by the original supplier.

1. After dispensing with the condition of pre - deposit of dues, I proceed to decide the appeal itself inasmuch as the issue stands covered by the precedent decision of the Tribunal. The appellant is engaged in purchase and sale of SIM cards of BSNL, Proceedings were initiated against the appellant for confirmation of Service Tax on the ground that by selling the SIM cards of M/s. BSNL, they provided services falling under the category of Business Auxiliary services. The said proposed confirmation of demand was contested by the appellant by submitting that they are not selling BSNL SIM cards on commission basis but are purchasing the same from them and are reselling in the market. The said SIM cards and recharge coupons are purchased from M/s. BSNL after depositing entire value of SIM Cards in advance with M/s. BSNL and they become the owner of said goods. They also submitted that it is mentioned on the invoices issued by BSNL that the SIM cards / recharge coupons once sold shall not be taken back. As such, they contended that they have purchased the said SIM cards / recharge coupons from BSNL. They also submitted that M/s. BSNL has discharged Service Tax on MRP of SIM cards / recharge coupons and demand against the appellant would amount to double taxation. The above pleas were not accepted by the lower authorities who have confirmed the demand and imposed penalties on the appellants. Commissioner (Appeals) took note of the earlier decision of the Tribunal in the case of M/s. South East Corporation v. CCE , Cochin reported in MANU / CB / 8069/2007 : 2007 (8) STR 405 (Tri. - Bang.) as also in the case of M/s. R.B. Agencies v. CCE reported in [MANU / CB / 8220/2007 : 2008 (11) STR 124 ] wherein it was held that sale of SIM cards by franchisees is not service and Service Tax is not chargeable to the amount of commission received by them. However, he had not followed the same by observing that said judgments are not good law in view of Hon'ble Supreme Court judgment delivered in the case of Idea Mobile Communication Ltd.

2. We have seen the Supreme Court judgment in the case of Idea Mobile Communication Ltd. [MANU / SC / 0898/2011 : 2011 (23) STR 433 (SC)]. The issue involved before the Hon'ble Supreme Court was as to whether the value of the SIM cards is required to form part of the activation charges or not. Inasmuch as the issue before the Hon'ble Supreme Court was entirely different than the issue involved in the present case we are of the view that following said decision by Commissioner (Appeals) in preference to the decision of Tribunal on the same issue as involved in the present case is not proper. We also refer to the latest decision in the case of Martend Food & Dehydrates Pvt. Ltd. vide Final Order No. ST / A / 684-687/2012 - Cus., dated 6-11-2012, wherein after taking note of the entire case law available on the said issue, the Tribunal in a detailed order has held that activity of purchase and sale of SIM card belonging to BSNL where BSNL has discharged the Service Tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributors for the second time is not called for. By following the said decision, we set aside the impugned order and allow the appeal with consequential relief to the appellants.