TaxTMI 
TaxTMI 
2026 (8) TMI 727
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....or the period 2006-07 and 2007-08, respectively A spot memo dated 20.10.2009 was issued by the department stating that as per Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 (hereinafter referred to as 'Valuation Rules'), any expenditure or cost which is incurred by the service provider in the course of providing taxable service, shall be included in the value for the purpose of charging service tax on the said service. The department observed that the value of unexposed positive film would form part of the value of taxable service and would therefore be liable to service tax of Rs.23,09,812/- along with interest. The appellants filed their detailed response on 14.12.2009 . However, a Show Cause Notice on 08.07.2011 was issued demanding service tax amounting to Rs.23,09,812/- under proviso to Section 73(1) of the Finance Act, 1994, along with interest under Section 75 and penalty under Section 76 and 78. After due process the same came to be affirmed by the lower authorities. Hence, the present appeal before the Tribunal. 2. The Ld Counsel appearing on behalf of the appellant makes the following submissions both on merits as well as on account of time-bar. 2.1 D....
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.... Lab, Versus The Superintendent of Customs, Khammam District And 4 Others, 2024 (6) TMI 773 - TELANGANA HIGH COURT • M/s. Bholas Album Centre Versus Commissioner, Service Tax Commissionerate, Bangalore, 2025 (7) TMI 558 - CESTAT BANGALORE • Commissioner of Central Excise v. Vahoo Colour Lab, 2010 (18) STR 548 (P&H). • Delux Colour Lab Pvt. Ltd. v. Commissioner of C. Ex., Jaipur, 2009 (13) STR 605 (Tri.-Del) 2.7 It is submitted that it is a settled position of law that service tax and VAT are mutually exclusive. In the instant case, VAT has been undisputedly discharged on the sale of positive films. The same shall be evident from the invoices raised by the Appellant on the service recipients. [Pg 98 & 110 of the memo of appeal] 2.8 It is a trite law that VAT and service tax are mutually exclusive. In this regard, reliance is placed on the decision of the Hon'ble Supreme Court in the case of Imagic Creative Private Limited v. Commissioner of Central Taxes - 2008 (9) S.T.R. 337 (S.C.) wherein the Hon'ble Supreme Court held that payments of service tax as well as VAT are mutually exclusive. 2.9 Further reliance is placed on the decision o....
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....' on which the Service Tax is paid by them. Thus on the total consideration, it is observed that the appellant is paying the VAT wherever it is required and paying the Service Tax wherever it is required. Thus the entire consideration is backed by the VAT or Service Tax payment. 6. We have gone through the copies of the invoices furnished by the appellant. Some sample invoices are reproduced below: From the above Invoices, we could see that the VAT is being paid on the Sale portion. Similarly on Services portion, the Service Tax is paid. 7. This issue had reached the Madhya Pradesh High Court in the case of M/s Agrawal Colour Advance Photo System, M/s Agrawal Colour Quick System, M/s Agrawal Colour Photo Industry Versus Commissioner of Central Excise and Another2020 (4) TMI 799 - MADHYA PRADESH HIGH COURT, wherein under similar circumstances, the Hon'ble Court has held as under: "5. Learned counsel for the appellants submitted that the value of photography paper and processing chemicals etc. are not a part of the value of the taxable services. According to him, the appellant is not liable to pay the service tax on the gross amount charged from its customers in lie....
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....which both the learned counsel for the parties are at loggerheads, is that whether this matter should go back to the authorities for examining the value of material consumed on the basis of invoices and other documents. In ordinary course, we would have agreed with the contention of Sri Dominic Fernandes. However, this matter is pending since 2006 and we find substance in the argument of learned counsel for the petitioner that it cannot be expected either from the petitioner or from the Department to lay their hands on the very old documents of the years prior to 2006. Apart from this, the document dated 18.07.2006 (Annexure-P.3) shows that the tax liability is "worked out" by the Department. Although Sri Dominic Fernandes stated that said exercise of "working out" is based on petitioner's letter dated 24.05.2006, we are not inclined to deal with this aspect any further because once the exercise of "worked out" is carried out, it is presumed that said exercise must be based on all relevant documents. In the peculiar facts and circumstances of this case and more particularly, the fact that it is not possible because of afflux of time to trace the invoices etc., we are inclined t....
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....le portion and Service Tax on the service portion. The cited case laws support the view taken by the appellant. These factual details show that there was no effort on their part to suppress or conceal any facts. But still the Revenue has waited for more than One year 7 months to issue the SCN on 8.7.2011, that too without bringing any evidence towards the suppression on the part of the appellant. 13. The Delhi Tribunal on the issue of time bar on identical matter in the case of DELUX COLOUR LAB PVT. LTD. Versus COMMISSIONER OF C. EX., JAIPUR reported in 2009 (13) S.T.R. 605 (Tri. - Del.), has held as under: "17. One issue which we may deal with relates to limitation. According to the appellant, the impugned demands have been confirmed invoking the extended period of limitation, but as the appellants did not commit any fraudulent act nor suppressed any information from the Department muchless with intention to evade the service tax, the non-payment, if any, by reason of non-inclusion of the value of the sale portion of the contract, that is, the non-disclosure of the gross total amount including the value of the materials, was on account of bona fide belief that service ....