2010 (2) TMI 156

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.... Tax Appeal against the impugned order dated 25-11-2008 (Annexure A4) of the Customs, Excise & Service Tax Appellate Tribunal, invoking the provisions of section 35G of the Central Excise Act, 1944 ('the Act'). 3. The matrix of the facts, culminating in the commencement of, relevant for disposal of present appeals and emanating from the record, is that the respondent-assessee Vahoo Colour Lab., Fountain Chowk, Ludhiana ('the assessee') is engaged in rendering service relatable to photography, developing and printing. The revenue claimed that during the course of inquiry, it revealed that the assessee has not sold the material/goods to the recipient of service and availed the benefit of Notification dated 20-6-2003 and wil....

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....e, 2003 the exemption in respect of input material consumed sold by the service provider to the service recipient while providing the taxable service is available. However the exemption is available only if the service provider maintains the records showing the material consumed/sold while providing taxable service. The value of such material should also be indicated on the bill/invoice issued in respect of taxable service." and dropped the proceedings initiated in pursuance of show-cause notice to the assessee, vide order dated 2-3-2006 (Annexure A2). 6. The order of the Adjudicating Authority and the claim of the assessee did not find favour and revisional authority reviewed the order of Adjudicating Authority and confirmed the dema....

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....eld that photography service is in the nature of works contract and it involves elements of both, sales and service and the service tax is leviable on the sale portion. 12. An identical question arose before the Hon'ble Supreme Court of India in case BSNL v. Union of India [2006] 3 STT 245, wherein it has been held that if the nature of transaction involved is composite contract, of service and sale and if the components of sale element is discernible, then both the components cannot be re-mixed for the purpose of relevant tax. 13. It is not a matter of dispute that processing of photography cannot be completed without the developing and printing process, to provide the service to the recipient. The photography films, printing pap....