9911796707
TMI Blog2006 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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 material and excise duty stands paid by the manufacturer on the raw material manufactured in India. The petitioner spends 77% of the total consideration on purchase of paper, chemicals, packing material and other material which attracts sales tax, exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials 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 material was not excludable. The petitioner found it difficult to give the actual cost of material used in the photography services and a representation was submitted, pointing out this difficulty, Annexure P.6 followed by further representations. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (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 transactions involving service as well as supply/sale was gone into and it was held that sale tax was not leviable under Article 366(29A) by applying "dominant intention" test by including value of service in sale element relying on "aspect theory" and on ser v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 the aforesaid observations in Associated Cement, (2001) 4 5CC 593; (2001) 124 STC 59 were merely obiter and that Rainbow Colour Lab, (2000) 2 5CC 385; (2000)118 SIC 9 (SC) was still good law, it was not correct. It is necessary to note that Associated Cement, (2001) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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