TMI Blog2024 (3) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the demand, interest and imposing penalties is set aside. Appeal allowed. - HON BLE MS. SULEKHA BEEVI.C.S., MEMBER (JUDICIAL) HON BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Mr. M. Saravanan, Consultant Mr. J. Shankarraman, Advocate For the Assessee Mr. Anoop Singh, Joint Commissioner (A.R) For the Department ORDER ORDER : [ Per Ms. Sulekha Beevi. C. S ] As the issue involved in both these appeals is same and arising out of common impugned order, they were heard together and are disposed of by this common order. For the sake of convenience, the parties herein are referred to as assessee and department . 2. Brief facts are that the assessee is engaged in the making of photo books/albums, calendars, brochures etc. to their different customers. Intelligence forwarded by DGCEI, New Delhi revealed that that the entire activity of the assessee would fall under Photography Services and that they are liable to pay service tax on the amounts received from their customers for the services provided by them. Based on such intelligence show cause notice dt. 16.10.2015 was issued to the appellant for the period 01.04.2010 to 30.06.2012 and 01.07.2012 to 31.07.2015 proposing to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he printing is carried out, the process cannot be said to be one of manufacture . Hence it is clear that if printing serves any purpose, then it amounts to manufacture . In this case also, only by printing, the required purpose is served and without printing nothing emerges. 3.3. The appellant submits that printing of any image in the form of book or in a single sheet amounts to manufacturing and it falls under chapter 49. Printing of book and photographs falls under chapter 49119100. Like wise printed books, brochures etc falls under 4901 of CETH. Hence the activity carried out by assessee is nothing but manufacture and not a service so as to attract service tax. Assessee has sold printed items and have paid sales tax on the same. All the printed items falls under chapter 49. 3.4 The Hon ble Supreme Court in the case of Fitrite Packers 2015(324) ELT 625 (SC) considered the question whether printing on packaging paper meant for M/s Parle Products would amount to manufacture or not in terms of section 2(f) (iii) of the Central Excise Act, 1944. The Apex Court held that it amounts to manufacture . 3.5 The Tribunal in the case of J. J. Enterprises vs. CCE reported at 2013 (295) ELT 32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... photographs were provided by the client which is printed within the digital printing machine and supplied as photo book. The question considered was whether the activity is service so as to be liable to service tax as photography service, both prior and post Negative list with effect from 01.07.2012. The Hon ble Tribunal relying on the decision of the Venus Albums (supra) set aside the demand of service tax, with interest and penalties. 3.11 The assessee in the present case was of the bonafide belief that the activity carried out by them is manufacture and will attract VAT and not service tax. The question involved in the present case is purely one of interpretational. The assessee paid VAT on the entire value of goods sold, which is a reasonable cause for non-payment of service tax liability, if any. It is argued that extended period is not invokable. 3.12 The appeal filed by the department is on the assumption that the assessee is liable to pay service tax under Photography service without any basis. Even for the period after 1.7.2012 the activity does not fall within the four corners of the definition of service defined in Section 65B (44) of the Finance Act, 1994. 4. Ld. Consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain to clients of the photo studios/photographers / companies etc. who have engaged them for providing photography services in relation to occasions like wedding ceremonies, birthday ceremonies, other functions etc. GLO print the details given by their customers like individual photographers phot studios etc. which includes photos in a book format and gives it to their customers; the said activities are also performed in the branch officers of GLO. GLO stores the raw materials required for business at their godowns. The photos/pictures to be printed are supplied by various photo studios, photo labs and photographers in soft from like CD, pen Drive and via E-mail etc; the photographs pertain to clients of the photo studios/photographers who have engaged them for providing photography services in relating to occasions / functions like wedding ceremonies, birthday ceremonies etc. GLO is engaged in the manufacture of photo albums/ photo books etc., of different sizes; photo albums/photo books containing photographs of 125 GSM (Grams per Square Metre) are made of LMO films; LMO which stands for laser Matte Opaque Film 125 DS (Double side) (LMO 5505) is a polyester film specially coate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial viz. calendars, visiting card, etc. The present dispute with regard to the sale of photo books to photographers/photo studios and individual photographers. An investigation was conducted at the business premises of the appellant and a show cause notice was issued to the appellant on 20-10-2015 alleging that the activity of printing of photo book belonging to a particular person falls under the scope of photography service under Section 65(105)(zb) of the Finance Act, 1994 till 30-6-2012 and thereafter it is taxable as a service under Section 66B(44) of the Act. It was also alleged that photo books are not the product of printing industry but a specialized and customized service provided to customer. It was proposed to demand service tax along with interest and to impose penalties under Section 77 and 78 of the Act. The demand of service tax has been confirmed on the premise that the activity of printing of personal photographs which is undertaken for a particular person falls under the scope of photography service till 30-6-2012. Thereafter as a service falls under Section 65B(44) of the Act and the photo books are not the product of printing industry but a specialized and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity amount to manufacture and the appellant is paying VAT and therefore, the said activity merit manufacturing activity and classified under Chapter 4911 and the appellant has classified accordingly. 20. We also take note of the fact that after introduction of GST, the classification of the same has been answered vide Circular F.No. 332/2/2017-TRU, dated 7th December, 2017 by observing that these items fall under HS Code 4911 an attract 12% GST. TABLE S. No. Queries Replies 62 What is the classification and GST rate for photo books printed using digital Offset printing press on printing paper [other than photo albums] and thereafter manually bound? 1. These items fall under HS code 4911 and attract 12% GST. 21. Further, we take note of the fact that Notification No. 14/2004-S.T., dated 10-9-2004 amended by Notification No. 19/2006-S.T., dated 25-4-2006 with effect from 1-5-2006, exempts specifically the activity of printing from payment of service tax. 22. We also take note of the fact that the service exempted in terms of Notification No. 25/2012-S.T., dated 20-6-2012 amended by Notification No. 44/2012-S.T., dated 7-8-2012, 49/2012-S.T., dated 24-12-2012 and Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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