TMI Blog2006 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions, Annexure P.2 pertaining to colour processing and developing laboratories and including the activities of colour processing and developing laboratories within the purview of taxable services for levying service tax and other consequential actions taken. 2. Case of the petitioner-firm is that it has set up a high-tech laboratory for developing and processing of exposed colour photographic films. It has no studio in its premises for still or video photography and only engaged in developing and processing exposed colour photographic films. Raw material used by the petitioner is paper and chemicals purchased after paying sales tax at the rate of 8.8% at the first stage and customs duty also stands paid by the importer on the imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials. Further circular was issued on the same day, Annexure P.4 to the effect that in case of authorised service stations, maintenance or repair services, commissioning and installation services and photography services, costs of goods and materials shall not form part of value to be subjected to service tax, if evidence showed that the goods were sold. In view of exemption granted vide notification, Annexure P.3, there has to be evidence of sale of goods and sale of goods has to be separately quantified and shown in the invoice. 3. Respondent No. 3 i.e., the Department of Revenue, Central Board of Excise and Customs wrote a letter to the Director General (Service Tax) Mumbai dated 3-9-2003, Annexure P5/A to the effect that cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon judgment of the Hon'ble Supreme Court in C.K. Jidheesh v. Union of India and Others, 2006 (1) S.T.R. 3 (S.C.) = (2005) 13 SCC 37, wherein while approving the judgment of the Kerala High Court in Kerala Colour Lab Assn. v. Union of India, 2006 (2) S.T.R. 554 (Ker.) = 2003 (156) E.L.T. 17 (Ker.) = (2003) 264 ITR 633, levy of service tax was upheld. The Hon'ble Supreme Court followed its earlier judgment in Rainbow Colour.lab. v. State of MP, 2001 (134) E.L.T. 332 (S.C.) = (2000) 2 5CC 385. It was also submitted that in judgment of three Judges Bench of the Hon'ble Supreme Court in Bharat Sanchar Nigam Limited (BSNL) and Another v. Union of India and Others, 2006 (2) S.T.R. 161 (S.C.) = (2006) 3 SCC 1, the issue of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001) 4 5CC 593 = (2001)124 SIC 59 saying (page74): The conclusion arrived at in Rainbow Colour Lab case (2000) 2 5CC 385, in our opinion, runs counter to the express provision contained in Article 266(29-A) as also of the Constitution Bench decision of this Court in Builders' Association of India v. Union of India, (1989) 2 5CC 645. We agree. After the 46th Amendment, the sale element of those contracts which are covered by the six sub-clauses of clause (29-A) 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. There fore, when in 2005, C,K. Jidheesh v. Union of India, (2005) 8 Scale 784; (2005) 5 RC 670 held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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