TaxTMI 
TaxTMI 
2019 (4) TMI 1419
X X X X Extracts X X X X
X X X X Extracts X X X X
....eported in 2007 (5) STR 423 (Tribunal), has been dismissed by the Hon'ble Supreme Court [2009 (14) STR J163] by order stating "civil appeal is dismissed". The relevant observations are reproduced below : "3. At the beginning of hearing by the Larger Bench, it was suggested by both sides that if question (2) and (3) appearing in para 3 of the referral order as extracted herein before is answered, that shall serve the purpose of Reference. With such suggestion, the Bench proceeded to hear the arguments advanced by both the sides on the following two questions only appearing in referral order reported as Agarwal Colour Advance Photo System v. CCE, Bhopal reported in [2010 (19) S.T.R. 181 (Tri.-Del.)] : "(2) Whether for the purpose of Section 67 of the Finance Act, 1994 the value of service provided in relation to photography would be the "gross amount charged" including the cost of material, goods used/consumed minus the cost of unexposed film? (3) Whether the term 'sale' appearing in exemption Notification No. 12/03-S.T., dated 20-6-03, is to be given the same meaning as given by Section 2(h) of the Central Excise Act, 1944, read with-Section 65(121) of the Finance Act, 1994....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been expanded so as to include certain deemed sales, including the transfer of property in goods involved in execution of work contract does not override provision relating to valuation of photography service under Finance Act, 1994 in view of object of this Act to levy tax on services. In view of settled legal position on this issue, the contention that the word "sale" in this notification would cover the deemed sale under Article 366(29A) of the Constitution is of no relevance for the reason that Notification does not override statutory provision. The word 'sale' in this notification has to be interpreted on the basis of its definition as given in Section 2(h) of the Central Excise Act, 1944, which by virtue of Section 65(121) of the Finance Act, 1994 is applicable to Service tax. When there is no primary intention of parties to sell paper, consumable or chemical in providing photography service there is no room left to plead fiction of Article 366(29A)(b) of the constitution in absence of any such sale of these commodities as goods qua goods. In case of transactions where sale of goods is made in disguise and incidentally while providing service, those transactions call for set....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nance Act, 1994 and whether the decision of Apex Court in Rainbow Colour Lab v. State of M.P. reported in (2000) 2 SCC 385 = 2001 (134) E.L.T. 332 (S.C.) and C.K. Jidheesh v. Union of India reported in (2005) 13 SCC 37= 2006 (1) S.T.R. 3 (S.C.) do not hold the field on the issue of valuation of the taxable service. (B) Section 67 provides that the value of taxable service shall be the gross amount charged by the service provider for such service rendered by him. The Explanation to Section 67 exempts only the cost of unexposed photography film, unrecorded magnetic tape or such other storage device, if any, sold to the client during the course of providing the service. Whereas Apex Court in BSNL case reported in 2006 (3) SCC1 = 2006 (2) S.T.R. 161 (S.C.) considered the meaning of 'goods' after 46th amendment in para 43-52 and in para 53 thereof, the Hon'ble Court approved the test that for being goods it should be capable of being bought and sold. Thus BSNL decision no where overrules the C.K. Jidheesh case [2005 (13) SCC 37 = 2006 (1) S.T.R. 3 (S.C.)] on any material issue relating to service tax. (C) Tribunal without appreciating the above mentioned fact allowed the claim of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld not be demanded and penalty u/s 76 & 77 of the Act should not be imposed. (E) It is submitted that the value/cost of goods which are consumed in the process are liable to be included in the value of photographic services. The decision of this Hon'ble Court in Rainbow Colour Lab and C.K. Jidheesh were also relied by the Adjudicating Authority. (F) Relying on the decision of this Hon'ble Court in BSNL case reported in 2006 (3) SCC1, it was held that the decisions of this Hon'ble Court which were relied by the appellant here [i.e. Rainbow Colour Lab. v. State of M.P. reported in (2000) 2 SCC 385 = 2001 (134) E.L.T. 332 (S.C.) and C.K. Jidheesh v. UOI reported in (2005) 13 SCC 37 = 2006 (1) S.T.R. 3 (S.C.)] were overruled in BSNL case. It is submitted that the Tribunal quoted para 41 to 49 of the decision of BSNL case which clearly show that said decision pertains to issue of levy of sales tax on "SIM Card" etc. which would not be attracted for the purpose of valuation of the photographic services under the Service Tax Act. (G) In C.K. Jidheesh case this Hon'ble Court rejected the prayer of the petitioners therein regarding bifurcation of the gross receipts of processing of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is the gross amount charged from the customer for service rendered and the goods which are consumed in the process of rendering service cannot be an item of sale; therefore the claim of the respondent was devoid of merit." 6.2 According to Shri Rao, learned Advocate, while deciding Surabhi Colour Lab case [2010 (20) S.T.R. 40 (Tri. - Bang.)] adjudicated by Revenue before Apex Court, the court has held as under :- "In the case of Adlabs v. CCE, Bangalore, reported in 2006 (2) S.T.R. 121 (Tri.-Bang.), it has been observed as follows : 3. On a careful consideration, we notice that the Commissioner was not justified in taking the view in contra to the Boards' letter and the Notification. The appellants have maintained the records of the inputs used in the photography, nowhere it is stated in the Circular and Notification that the inputs used in the photography should be mentioned in the invoices/bills issued to the customers. The reasoning given by the Commissioner is not sustainable. In view of the clarification given in the Boards' letter and the Notification itself the denial of benefit by the lower authorities is not justified and not correct in law. The appellants are eli....