UNIVERSAL ENTERPRISES Vs. COMMISSIONER OF C. EX., LUDHIANA

JUDGEMENT

(1.) AFTER hearing both the sides, we find that the appellant is a distributor of SIM cards of M/s. Bharti Mobiles Ltd. He purchases the said SIM cards from M/s. Bharti Mobiles Ltd. and sell the same in the market. Revenue by entertaining a belief that such activity amounts to business auxiliary service, raised demand of Service tax against the appellant by way of issuing a Show Cause Notice dated 18 -3 -2009 proposing to confirm the demand for the period January 2004 to March 2005. The said Show Cause Notice was dropped by the original adjudicating authority on merits, by taking note of various decisions of the Tribunal and holding that such activity amounts to sale and purchase of SIM cards and no service is involved. As he dropped the Show Cause Notice on merits, the appellant's plea on limitation was not considered.

(2.) THE said order of the original adjudicating authority was reviewed by Commissioner, by way of issuance of Show Cause Notice on 14 -2 -2011, in terms of the provisions of Section 84 of Finance Act, 1994. The Commissioner vide his impugned order, reversed the order of the original adjudicating authority. He relied upon the Hon'ble Supreme Court's decision in the case of BSNL v. Union of India - : 2006 (03) LCX 0022 = 2006 (2) S.T.R. 161 (S.C.) holding that the activity of purchase and sale of SIM cards amounts to providing service falling under the category of Business Auxiliary Service. He also relied upon the Kerala High Court decision in the case of Escotel Mobile Communications Ltd. v. Union of India - : 2002 (02) LCX 0013 = 2006 (2) S.T.R. 567 (Ker.) = 2004 (177) E.L.T. 99 (Ker.) as also on the judgment of M/s. Bharti Cellular Ltd. v. CCE - : 2004 (10) LCX 0150. As regards limitation, Commissioner observed that inasmuch as the appellants have failed to discharge their service tax liability, the extended period is available to the Revenue. Accordingly, he confirmed the service tax to the extent of Rs. 12,28,535/ - and penalty of identical amount was imposed, in addition to imposition of penalties under Section 75 and 76 of the Finance Act, 1994. We find that the Assistant Commissioner had addressed a letter to the appellant on 12 -7 -2005 indicating that as the appellants are providing services of distribution of SIM cards for M/s. Bharti Cellular Ltd. they are liable to pay service tax. Accordingly, the appellant was requested to calculate the amount of service tax and to deposit in the bank along with interest.

(3.) LD . AR appearing for the Revenue submits that the said correspondence between the appellant and the Revenue is of July/August 2005 and inasmuch as the period in the present appeal is from Jan. 2004 to March 2005, disclosure of the above facts cannot help the assessee to claim the benefit of limitation. He submits that during the relevant period, there was suppression on the part of the assessee and as such extended period of limitation was available to the Revenue in terms of the decision of Ahmedabad High Court in the case of CCE v. Neminath Fabrics Pvt. Ltd. - : 2010 (256) E.L.T. 369 (Guj.).