Printing photographs into finished photo books is manufacture, not photography service, when it creates a distinct commercial product.

Printing photographs, photo books, calendars, brochures and similar items from customer-supplied soft copies, and supplying them as finished goods, was treated as manufacture because the process produced a new and distinct commodity with a different name, character and use. The Tribunal followed Venus Albums Private Ltd. and held that such products fall under the printing industry and Chapter 49, so the activity is not photography service or any other taxable service. Service tax, interest and penalties therefore could not survive.

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Issues: Whether the activity of printing photographs, photo books, calendars, brochures and similar products from soft copies and supplying the finished goods amounted to manufacture or to photography service and taxable service.

Analysis: The activity involved receiving images in soft form, printing them on media such as paper and paper board, and converting them into finished products like photo books, albums, calendars, brochures and similar printed items. The Tribunal followed the earlier decision in Venus Albums Private Ltd., which held that the process of printing photographs and binding them into photo books brings into existence a new and distinct product with a different name, character and use. The finished goods were treated as products of the printing industry classifiable under Chapter 49, and the activity was not treated as photography service. The decision also noted the support from the statutory scheme and the exemption notifications relating to printing activity.

Conclusion: The activity amounted to manufacture and not to photography service or other taxable service, so the demand of service tax, interest and penalties could not survive.

Ratio Decidendi: Printing photographs and converting them into bound photo books or similar finished printed products creates a distinct commercial commodity classifiable as manufacture, and such activity is not taxable as photography service merely because the source material consists of images supplied by customers.

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