Tribunal Upholds Ruling: No Service Tax on Identity Card Preparation for Election Commission

The Tribunal upheld the Order-in-Appeal setting aside Service Tax demands on the respondents for preparing identity cards for electors on behalf of the Election Commission of India. It was determined that issuing identity cards constituted a sovereign function not subject to Service Tax, in line with a previous ruling and relevant provisions of the Finance Act. The appeal by the Revenue was dismissed, affirming the decision in favor of the assessee.

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Issues: Revenue appeal against Order-in-Appeal setting aside demands of Service Tax on the respondents for preparing identity cards for electors on behalf of the Election Commission of India.

Analysis:
1. The appeal was filed against the Order-in-Appeal No. 2/2007 setting aside the demands of Service Tax on the respondents for preparing identity cards for electors on behalf of the Election Commission of India. The Revenue considered the activity to fall under 'Photography Services,' but the assessee argued that issuing identity cards was a sovereign function and not subject to Service Tax. The Commissioner (A) upheld the assessee's plea, leading to the Revenue's appeal.

2. The learned Consultant referred to a similar case where the Tribunal dismissed Revenue appeals and allowed parties' appeals, ruling that Service Tax was not applicable to photo identity cards prepared for the Election Commission of India. The Final Order dated 23-7-2007 supported the contention that Service Tax was not leviable on such cards.

3. The department, represented by the Joint Commissioner, contended that they did not accept the Tribunal's ruling in the cited case but acknowledged that the matter was under appeal. However, there was no stay order against the Final Order supporting the assessee's position.

4. The Tribunal considered the previous Final Order related to a similar case and held that preparing elector photo identity cards did not fall within the scope of photographic services under the Finance Act. Citing precedents and applying relevant sections of the Act, the Tribunal found in favor of the assessee, upholding the Commissioner (A)'s order as legal and proper. The appeal was deemed meritless and rejected accordingly.

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