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2018 (8) TMI 425 - HC - Service TaxClassification of services - preparation of Electoral Photo Identity Card (EPIC) - whether the service would come under the head Photography seervices or otherwise? - Clarification by a letter No. 334/4/2006-TRU dated February 28, 2006. Whether preparation of EPIC by the petitioner attracts Service Tax? Held that:- Clarification 334/4/2006-TRU dated February 28, 2006 had noted that, often services provided consist of more than one service. In such situation, it had opined that, the guiding principle would be to identify the essential features of the transaction. The department had issued another clarification by Circular No. 334/1/2008-TRU dated February 29, 2008. It had noted Section 65A of the Finance Act, 2008. It had opined that, a supply which comprises with a single supply for an economic point of view should not be artificially split. The method of charging or invoicing does not in itself determine whether the service provided is a single service or multiple services. Single price normally suggests a single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor for deciding the classification. The department had issued a third Circular bearing No. 104/7/2008-S.T. dated August 6, 2008. It had opined that, both the form and substance of the transactions are to be taken into account. The guiding principle is to identify the essential features of the transaction. The subject contracts cannot be said to limit itself to photography. Preparation of a photograph or photography is not the sole purpose of the contracts. The end product is EPIC. Such end product involves a photograph of a voter. The photograph of the voter incorporated in EPIC is not a standalone product - the contract for EPIC cannot be divided into separate compartments to say that, photography or photograph is a separate compartment. It is indivisible. The contracts in question are for preparation of EPIC. The petitioner cannot be said to have rendered any photographic services to an individual or to the person who had entered into the contract with the petitioner. In CMC Limited [2007 (7) TMI 17 - CESTAT, BANGALORE], CESTAT, South Zonal Bench, Bangalore has held that, issue of EPIC cannot be considered to be falling within the definition of “photography” and “photography studio or agency” in terms of Sections 65(78) and 65(79) of the Finance Act, 1994. The petitioner not having rendered any service of photography is not liable to pay Service Tax - petition allowed - decided in favor of petitioner.
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