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2015 (12) TMI 1567 - AT - Service TaxDemand - non-payment of service tax under photography services during the period 2004-05 - appellant contended that they have started business in the year, 2004 and they are not conversant with the legal provisions. However, they got themselves registered with the Service Tax Department in April, 2005 - substantial income on simple sale of items, like, cameras, camera covers, film rolls etc. - Held that:- it is found that the pure sales of materials has no bearing to the service tax liability and cannot be added to the taxable value. This aspect was not examined by the lower authorities. We find that the appellants are liable to service tax during the impugned period on the value of services provided, but not on simple sale of various items, which are not part of taxable service provided to any person. With these facts in position, the demand requires re-working deducting the simple sale of items, which are not connected to any service rendered by the appellant. The service tax liability will stand reduced to that extent. Imposition of penalty - Sections 76, 77 and 78 of the Finance Act, 1994 - appellant submitted that the penalties under Sections 76 and 78, cannot be imposed for the same offence - Held that:- it is found that various judicial pronouncements have clarified that imposition of both the penalties on the same issue, is not legally tenable. Accordingly, penalty under Section 76 is set aside. Penalty under Section 78, will stand to the extent of service tax liability re-worked as above. Penalty under Section 77 is also upheld. - Decided partly in favour of appellant
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