2016 (12) TMI 286 - AT - Service Tax

Photographic service provider wins appeal against tax demand exceeding limitation period.

The Tribunal ruled in favor of the appellant, a photographic service provider, in a case where a demand of Rs. 24,847 was confirmed against them for the ... Demand - valuation - photographic service - the value of the material used by him, while providing the said services, are required to be added in the assessable value of the services - Held that: - the issue on merits stand decided against the appellant by Larger Bench decision of the Tribunal in the case of Aggarwal Colour Advance Photo System Vs. CCE [2011 (8) TMI 291 - CESTAT, NEW DELHI (LB)], where it was held that The value of other goods and material, if sold separately would be excluded under exemption Notification No. 12/2003 and the term 'sold' appearing thereunder has to be interpreted using the definition of 'sale' in the Central Excise Act, 1944 and not as per the meaning of deemed sale under Article 366(29A)(b) of the Constitution. Period of limitation - Held that: - reliance placed on the decision of the case of CCE Vs. Centre Point Colour Lab [2011 (9) TMI 269 - CESTAT, NEW DELHI], where it was held that longer period of limitation would not be available to the Revenue. Demand set aside - appeal allowed - decided in favor of appellant. Issues:1. Demand confirmed against the appellant for adding value of material used in photographic services.2. Invocation of longer period of limitation for raising the demand.Analysis:1. The judgment addresses the issue of a demand of Rs. 24,847 confirmed against the appellant, a photographic service provider, for the period October 2003 to March 2005. The demand was raised on the grounds of adding the value of material used in providing services to the assessable value. The Tribunal noted that a similar issue was decided against the appellant by a Larger Bench decision in a previous case.2. The key point of contention was the invocation of the longer period of limitation for raising the demand. The Tribunal referred to a precedent decision where it was held that the longer period of limitation would not be available to the Revenue in identical circumstances. The Tribunal cited the case of CCE Vs. Centre Point Colour Lab to support this conclusion, emphasizing that there was a bona fide doubt regarding the inclusion of material cost in the value of services. The Tribunal highlighted that the issue of limitation was extensively discussed in a similar matter, where it was ruled that notices issued beyond the limitation period would not stand, and no penalty would be imposed due to a bona fide belief held by the assessee.3. The Tribunal, in line with the precedent decisions and the agreement of the ld. Departmental Representative, concluded that the demand beyond the normal period of limitation was time-barred. Therefore, the Tribunal set aside the demand and allowed the appeal with consequential relief to the appellant. The case was remanded for requantifying the duty demand falling within the period of limitation, with consideration given to the eligibility of the appellant for credit of duty/tax paid on raw materials.