TaxTMI 
TaxTMI 
2018 (6) TMI 1159
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....ients, frank them as per weight and then mail the documents/packets concerned. For this activity, appellants collected certain service charges from the clients. The appellants were discharging tax liability in respect of service charges received from their clients with effect from 16.06.2005, namely, from the date from which "Mailing List Compilation and Mailing Services" became taxable under the Finance Act, 1994. 2. In respect of franking cost, the clients take out demand drafts in favour of the Post Master General. In some cases, appellants pay the franking cost on behalf of their customers, however, get it reimbursed from the latter subsequently. Appellants also receive a rebate of 3% on the franking charges from postal department. D....
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....iate postage on the letters by making use of the licensed franking machines. (ii) As per Section 17 (2) of the Indian Post Office Act, 1898 postage franked through Franking Machine is a statutory levy and therefore it cannot be considered as a consideration for the purpose of Section 67 of the Finance Act, 1994 as amended to impose Service tax. (iii) The clients of the Appellant had taken the demand draft for the franking charges directly in the name of Post Master General and the same cannot be considered as a consideration. (iv) In case of the shortage if any in the franking charges the Appellant takes a DD in favour of the postmaster general and is reimbursed by the client. (v) As there is nothing flow....
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....the value on the ground that it is ultra vires Section 66 and Section 67 and travels much beyond the scope of the said Sections. (ix) The postal department gives the rebate to encourage the use of franking machine and there is no service provider-client relationship between appellant and the post office and according to the Memo of the postal department, the 3% rebate for the use of the franking machines is an "independent concession". Franking machine is used to avoid pasting of postage stamps, avoid pilferage and thereby make the work much convenient and easier way. 4. On the other hand, Ld. AR supports the impugned order. 5. Heard both sides. 6. It is not disputed that the costs related to franking are paid directly to ....
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....hat decision are as under: "7. Having heard the rival contentions, we cannot but be surprised by the discriminatory approach in the two impugned orders situated in identical circumstances by the same appellate authority. The more specific taxable service of 'mailing list compilation and mailing' was notified only from 16^th July, 2005 and taxing that very service under any other entry that existed till then is an act of overreach contrary to legislative intent of taxing the rendering of that service only with effect from 16th June, 2005. The later order in the matter of M/s. Sai Mailing Service was decided without taking into account the benefit of enlightenment in the form of the order in the matter of M/s. United Mailing Service ....
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....the statutory nature of carriage of postal articles. The appellants enter into a contract with certain business entities to facilitate bulk mailing. The entire activity of dispatch is effected by the appellants on behalf of the business entities and the appellants re, therefore, the users of the post office. The business entities that contract with the appellants do not approach the post office for any service. This has been acknowledged by the original and appellate authorities in accepting the reimbursements as precisely that; they ignored this finding of theirs and merely concerned themselves with deeming the rebates as the consideration obtained by the appellants from the post office. The appellants have the status of bulk mailers in re....