Order Date – 24 August 2023

Parties: M/s S. R. Medical Agencies Vs Commissioner of Central Excise, Chandigarh-II

Facts – 

• The Appellant, M/s S. R. Medical Agencies, is a “Authorized distributor/Franchisee” of M/s Bharat Sanchar Nigam Ltd.
• Show cause notice dated 21.10.2010 was issued to the appellant alleging that the commission and discount received by the appellant is appeared to be fell under the definition of "Business Auxiliary Service" and the Ld. Commissioner confirmed the demand along with penalty.

Issue –

• Whether the commission and discount received from BSNL is taxable under "Business Auxiliary Service"?

Order –

• The Tribunal observed that this issue has been considered by various benches of the Tribunal and has consistently been held that the assessee is not liable to pay service tax under the category of „Business Auxiliary Service‟.
• Further, this Tribunal in the case of M/s Devangi Communications and others vs. Commissioner of Service Tax, Mysore vide Final Order No. 21144-21158 of 2018 dated 16.08.2018 held that when the telecom operators are discharging service tax on the whole MRP value of SIM cards and recharge cards, then there could be no further service tax liability on the persons who are dealing/selling the said SIM cards or recharge cards to the public.
• Further, regarding the contention of the Ld. DR that there is a specific contract between BSNL and the appellant, we find that similar is the issue with all the service providers like BSNL and other operators and respective dealers as has been elaborately discussed in Tribunal‟s Delhi Order CCE vs. Moradabad Gas Services 2013 (31) STR 308 (Tri.-Del.).
• Hence, the impugned order is not sustainable in law and the appeal is allowed.