TMI Blog2019 (4) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... ale in the Central Excise Act, 1944 and not as per the meaning of deemed sale under Article 366(29A)(b) of the Constitution. Appeal allowed - decided in favor of appellant. - Appeal No. S.T./112/09 - ORDER NO. FO/A/75026/2019 - Dated:- 7-1-2019 - SHRI P.K.CHOUDHARY, MEMBER (JUDICIAL) AND SHRI V. PADMANABHAN, MEMBER (TECHNICAL) On Merit Shri S. Mukhopadhyay, Supdt. (A.R.) for the Revenue ORDER Per Bench : This is a second round of litigation before the Tribunal. We find that the appeal has been listed on Board at various dates, but none appeared on behalf of the appellant. However, an application has been received praying for deciding the appeal on merit. 2. Heard the ld.D.R. for the Revenue and perused the appeal records. 3. We find that the issue is no more res-integra in view of the decision of the Larger Bench of the Tribunal in the case of Aggarwal Colour Advance Photo System Vs. Commr. of Central Excise, Bhopal reported in 2011 (23) STR 608 (Tri.-LB). The period of dispute in the present case is from April, 2003 to September, 2003. We find that the Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is a direct judgment of Hon ble Supreme Court on the issue of valuation of photography service. 5. So far as the third question referred to the Larger Bench is concerned, the view of the Referring Bench was as under :- Notification No. 12/2003-S.T., dated 20-6-2003 fully exempts from Service tax, the value of the goods which are sold in course of providing a taxable service. The contention of the appellant in appeal Nos. ST/301, 302 and 303/2006 and of the respondent in appeal No. ST/437/2009 is that the term sale in this Notification also includes the deemed sale under Article 366(29A) of the Constitution and, therefore, if a service contract is a work contract and hence divisible into service component and goods component for the purpose of charging Sales tax on the goods component, no service tax can be charged on the goods component and the same being deemed sale, would be exempt from Service tax under this notification. But in a service of photography when there is no sale of goods involved following the ratio laid down in the case of Everest Copiers v. State of Tamilnadu reported in (1996) 103 S.T.C. 360 (S.C.) and service element is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service to determine assessable value of such service. Taking into consideration the decision of the Tribunal in Surabhi Colour Lab. case [2010 (20) S.T.R. 40 (Tribunal)], the Hon ble Apex Court having dismissed Revenue s appeal in the past Reference need not be answered in favour of Revenue and the present reference was unwarranted. Such a view is also supported from the judgement of Hon ble High Court of Punjab and Haryana in the case reported in 2010 (18) S.T.R. 548 (P H) which has held that the gross amount charged does not necessarily imply value of the chemicals and other consumables used in the course of providing photography services. 6.1 Shri Rao pointed out that Revenue went in appeal before Apex Court on following grounds among others : (A) Whether the value of taxable service for the purpose of Service Tax is not the gross amount charged from the customer for service rendered and whether while valuing the photographic services for the purpose of Service Tax the value/cost of goods which are consumed in the process are not liable to be included in the value of photographic services. Another question raised was as to whether the ratio of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pects including the aspect of double taxation. We find no infirmity in that judgement. The principles set out therein fully apply herealso. Thus the decision of the Tribunal is totally erroneous and liable to be set aside by this Hon ble Court. Further the Tribunal failed to appreciate that in case of sale of material the dealer is permitted to claim exemption by producing the invoice and other necessary documents. The provisions of Section 65(47), 65(48), 65(72)(zb), 66 read with Section 67 and its explanation it is abundantly clear that the value of taxable service for the purpose of Service Tax 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 and the Tribunal has erroneously relied on the decision of BSNL which pertains to sales tax and where the issue of definition of goods for the purpose of sales tax was involved. (D) On further scrutiny it was found that the respondents have grossly undervalued their tax liability by deducting the cost of raw material from the gross amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (zb) of Section 65(72). (H) 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 this Hon ble Court in BSNL case [2006 (3) SCC (1) = 2006 (2) S.T.R. 161 (S.C.)] considered the meaning of goods after 46th amendment in para 43-52 and in para 53 this 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. The Tribunal further erroneously held that summary dismissal of SLP against decision of Kerala Colour Lab. would not tantamount to affirmation of the decision of the High Court. It is submitted that decision of Kerala Colour Lab. was considered by this Hon ble Court in C.K. Jidheesh v. Union of India [2005 (13) SCC 37 = 2006 (1) S.T.R. 3 (S.C.)] on merit in para 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 7060 of 2009, dated 21-7-2010, following its decision in Surabhi Colour Lab. in Civil Appeal No. 263 of 2008. 6.4 Citing the decision of Tribunal in case of Adlabs - 2006 (2) S.T.R. 121 (Tri.-Bang.), Ld. Counsel submitted that Tribunal has a consistent view that the Assessees are eligible for benefit of deduction in terms of Board s Notification No. 12/2003-S.T., dated 20-6-2003 and Board s Clarification in letter No. 233/2/2003-CS.4, dated 7-4-2004 addressed to Punjab Colour Lab Association. 6.5 Relying on the decision of Hon ble High Court of Punjab and Haryana in the case of Vahoo Colour Lab. - 2010 (18) S.T.R. 548 (P H), submissions of Assessee was that processing of photography is a works contract and it involves elements of both sale and service, therefore, service tax is not leviable on the sale portion. 6.6 The appellants submitted that the decision of the Tribunal and the law laid down by Apex Court are Stare decisis basis following the Apex Court s decision in Shankar Raju v. Union of India - JT 2011 (1) SC 49. Therefore, Revenue has no case in Reference when it has lost its appeals repeatedly before Apex Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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