Appellate Tribunal upholds service tax liability for photography services. Commissioner partially allows appeal.

The Appellate Tribunal CESTAT NEW DELHI upheld the service tax liability for under-declaration of gross value received for providing taxable photography services during 2004-2005 and 2005-2006. The Commissioner (Appeals) partially allowed the appeal by excluding trading income disclosed in sales tax returns for a specific period, resulting in a service tax liability of approximately &8377; 2,50,00,000. The petitioner's tax liability was ultimately determined to be &8377; 25 lakhs plus interest and penalties. The Tribunal granted a waiver of pre-deposit and stayed further proceedings on the condition that the petitioner remits &8377; 12,50,000 plus interest within eight weeks.

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Issues involved: Assessment of service tax liability for under-declaration of gross value received for providing taxable photography service during 2004-2005 and 2005-2006.

Summary:
1. The Appellate Tribunal CESTAT NEW DELHI considered a case where a Show Cause Notice was issued asserting a service tax demand for under-declaration of gross value received for providing taxable photography service during 2004-2005 and 2005-2006. The Additional Commissioner confirmed the service tax liability as proposed in the Show Cause Notice. The petitioner claimed that they started providing the taxable service only since 1.3.2005 and had been pursuing trading activity. The adjudicating authority rejected the petitioner's claim and confirmed the service tax liability based on the receipts for 2004-2005 and 2005-2006.

2. The petitioner appealed the decision, and the Commissioner (Appeals) partly allowed the appeal by excluding the trading income disclosed in the sales tax returns for the period 1.1.2005 to 31.3.2005 from the gross value. The appellate authority determined the service tax liability to be around &8377; 2,50,00,000.

3. The petitioner's counsel conceded that the trading activity value for the entire period of 2004-2005 was not disclosed. The tax liability on the service tax component was determined to be &8377; 25 lakhs plus interest and penalties.

4. The petitioner later submitted sales tax returns for the first three quarters of 2004-2005 before the Tribunal. The Tribunal declined to consider this additional evidence at that stage but allowed the petitioner to file an application for its consideration during the appeal hearing.

5. Considering the circumstances, the Tribunal granted a waiver of pre-deposit and stayed further proceedings for the realization of the adjudicated liability on the condition that the petitioner remits &8377; 12,50,000 plus interest within eight weeks. Failure to comply would result in the rejection of the appeal. The petitioner's counsel acknowledged the order, and the stay application was disposed of accordingly.

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