TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 426
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....ed upon various other judgments including the judgment of Jain Brothers Vs. CCE, Bhopal [2009(13) STR 633 (Tri. Del.)] which was upheld by the Hon'ble Supreme Court reported at. 2012(28) STR J62 (SC). He also placed reliance on the following judgments:- i. Savithri Digital lab Vs. CCE, Coimbatore [2009(16) STR 462 (Tri. Chennai) - Affirmed by the Hon'ble Supreme Court reported at Commissioner Vs. Savithri Digital Lab [2011(24) STR J25(SC)]. ii. Adlabs Vs. CCE, Bangalore [2006(2) STR 121 (Tri. Bang.)] - Department appeal dismissed by Hon'ble Supreme Court reported at Commissioner Vs. Adlabs [2011(23) STR J27 (SC)] iii. CCE&ST, Mangalore Vs. Classic Color Lab [2018(8) TMI 1113 - CESTAT, BANGALORE] iv. CCE, Indore Vs. Photo Fast Colour Lab [2015(12) TMI 19 - CESTAT, NEW DELHI v. Agarwal Colour Advance Photo System Vs. CCE&ors. [2020(4) TMI 799 - Madhya Pradesh High Court] vi. Waidhan Engineering & Industries Pvt. Ltd. Vs. CCE [2020(4) TMI 867 - Madhya Pradesh High Court] He submits that in view of the above settled position, the present appeal is deserved to be allowed. 3. Smt. C.V. Savitha, learned Superintendent(AR) appearing on behalf of the Revenue reiterates the fin....
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....Industries Ltd. v. ACCE - 1992 (57) E.L.T. 674 (Cal.) (vii) The decision of this Bench in Adlabs case (cited supra), is in favour of the appellant. (viii) The Apex Court, in the case of BSNL (cited supra) has held that once it is possible to bifurcate in any transaction the sale or the service portion, the respective Tax is to be levied on the respective portions only. (ix) In the following decisions, it has been held that in the process of consumption of various chemicals, there is indeed a transfer of property from the service provider to the customer. (a) Commissioner of Sales Tax v. Matushree Textile Ltd. - 2003 (132) STC 539 (Bombay) (b) Live Tone v. State of Tripura and Others - 2001 (122) STC 0115 (Gauhati) (c) Xerox Modicorp Ltd. v. State of Karnataka - 2005 (7) SCC 380 (x) The circular issued in March 2006 denying the benefit conferred by earlier Circular can be having only prospective effect. (xi) The demand of Rs. 31,04,826/- is on account of the Service Tax on the services rendered by the appellant to other photographic studios. In terms of Section 65(105)(zb) of the Finance Act 1944, taxable service in relation to photography is the service provid....
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....rvices rendered to a customer, by a photography studio or agency in relation to photography, in any manner." Section 68(78) and (79) of the Finance Act are reproduced below:- "(78) "photography" includes still photography, motion picture photography, laser photography, aerial photography or fluorescent photography; (79) "photography studio or agency" means any professional photographer or a commercial concern engaged in the business of rendering service relating to photography." 8.1 Although the fact that the appellants render photography services which comes within the ambit of Finance Act, 1994 for levy of Service Tax is not in doubt, Shri Saju K. Abraham, the learned Chartered Accountant, appearing for M/s. Surabhi Colour Lab, urged the point that his client M/s. Surabhi Color Lab undertakes printing photograph of various sizes and this should not be considered as rendering any service for the reason that the material cost in printing photograph is much more than the labour cost. He has also cited quite a few decisions. In the light of the definition of Photography services in Section 65(zb), we are not inclined to accept the above contention of Shri Saju K. Abraham. In pr....
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....d materials sold by service provider to recipient of service - Value thereof, exempted In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts so much of the value of all the taxable services, as is equal to the value of goods and materials sold by the service provider to the recipient of service, from the service tax leviable thereon under section (66) of the said Act, subject to condition that there is documentary proof specifically indicating the value of the said goods and materials. 2. This notification shall come into force on the 1st day of July, 2003. [Notification No. 12/2003-S.T, dated 20-6-2003] In terms of the above Notification, the value of the goods and materials sold by the Service provider to the recipient of the service is to be excluded for the purpose of calculating the Service Tax. However, the Notification is subject to the following condition:- There should be a documentary proof specifically indicating the value of the said goods and materials. In the absence of documentary proof, a service provider may claim d....
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.... of the Board's circular and the Notification. The order passed by the impugned authorities is not correct in law as the same is contra to the Board's letter and the Notification. The impugned order is set aside by allowing the appeal." Though the above decision is in favour of the appellants, the Principal Bench, Delhi took a contrary view in M/s. Laxmi Color (P) Ltd. v. CCE, Jaipur-II. While taking a contrary view, CESTAT, Delhi relied on the following decisions:- (i) C.K.-Jidheesh v. UOI - 2006 (1) S.T.R. 3 (S.C.) = 2005 (71) RLT 505 (S.C.) (ii) Rainbow Colour Lab. & Anr. v. State of MP. & Ors. - 2001 (134) E.L.T. 332 (S.C.) = 2000 (2) SCC 385. 8.6 In order to appreciate the issues, we shall examine the decision in the case of Rainbow Colour Lab. The Rainbow case relates to Sales Tax. The Madhya Pradesh Sales tax authorities took a view that the job done by photographers amounted to "works contract". They took advantage of the 46th Amendment of the Constitution and the consequent amendment to the definition of 'sale' in section 2(n) of the local Sales Tax Act. The authorities decided that the turnover of the photographers would be exigible to the levy of Sales Tax. This ....
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..... 161 (S.C.), has overruled the decisions in the case of C.K. Jidheesh and Rainbow Colour Lab cases. In order to appreciate the implications of BSNL decision to the present appeals, we like to present the following background information:- 8.10 The issue before the Apex Court was the nature of transaction by which mobile phone connections are enjoyed. In other words, it was to be decided whether the transaction is a sale or service or both? Only the States is competent to levy Sales Tax. As regards Service Tax, the Centre alone is competent in view of the constitutional provisions. BSNL maintained that the transaction is purely service and the Union Government supported that stand. However, the States contended that the transaction was a deemed sale and Article 366(29A)(d) of the Constitution read with the charging sections in their various sales tax enactments and, therefore, they are competent to levy sales tax on the transactions. 8.11 The Apex Court, in the above said decision, has delved deep into the legal history of Article 366(29A). The classical concept of sale was held to apply to the entry in the Legislative List and three essential components are required to constit....
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....her valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made; We find that Clause (b) covers cases relating to works contract. The problem created by Gannon Dunkerly decision was overcome and, therefore, transfer of property in goods involved in the execution of the works contract was deemed to be a sale by this amendment. In para 40, the Apex Court has observed "the amendment especially allows specific composite contracts viz. works contract [Clause (b)], hire purchase contracts [Clause (c)], catering contracts [Clause (e)] by legal fiction to be divisible contracts where the sale element could be isolated and be subjected to sales tax." 8.12 Para 44, 45, 46 and 47 are very r....
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.... covered by the six sub-clauses of Clause (29A) of Article 366 are separable and may be subjected to sales tax by the States under Entry 54 of List II and there is no question of the dominant nature test applying. Therefore when in 2005, C.K. Jidheesh v. Union of India - (2005) 8 SCALE 784 held that the aforesaid observations in Associated Cement (supra) were merely obiter and that Rainbow Colour Lab (supra) was still good law, it was not correct. It is necessary to note that Associated Cement did not say that in all cases of composite transactions the 46th Amendment would apply. From the above, it is very clear that the apex Court has overruled the decisions in Rainbow Color Lab and C.K. Jideesh cases which were relied on by the Tribunal in the case of Laxmi Color (P) Ltd. case. 8.13 There is another issue which has been dealt with by the Supreme Court in the above decision. While dealing with the issues raised by the petitioners, the Apex Court formulated the following questions :- (A) what are "goods" in telecommunication for the purposes of Article 366 (29A) (d)? (B) is there any transfer of any right to use any goods by providing access or telephone connection by the t....
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....f the services to be included in the sale of goods or the price of goods in the value of services. The implication of the above decision for the present case is that in the services relating to photography, if certain goods and materials are consumed, then the value of those goods and materials cannot be included in the value of the services for levy of Service Tax. In the result, the decision of this Tribunal in the Adlabs case is correct and legal in the light of the Apex Court's decision in BSNL case. Hence, we allow the appeals with consequential relief if any. We also observe that the Circular dated 3-3-2006 is not in accordance with the ratio of the decision of the Apex court in the BSNL case. 4.3. The aforesaid decision of this Tribunal has been upheld by the Hon'ble Supreme Court by dismissing the Department's Civil Appeal Nos.257-258 and 3599 of 2008. Therefore, the issue stands settled in favour of the appellant. 5.1. Identical issue has been considered in another judgment in the case of Jain Brothers (supra) wherein the following order was passed:- 3. We have carefully considered the submissions from both the sides. The issue has already been decided by the Tribunal ....