2007 (4) TMI 94 - AT - Service Tax

Stay/Dispensation of the deposit - Revenue contended that appellant activity of production of Electoral Photo Identity Cards & Bus passes is covered under photography services and accordingly demand of service tax were made - Held that revenue contention was not correct and allowed waiver of pre-deposit to appellant

Summary

Issues:
1. Waiver of pre-deposit of Service tax.
2. Classification of activity as Photographic Services.
3. Discrepancy in department's view compared to previous rulings.

Analysis:
1. The appellant sought waiver of pre-deposit of Service tax amounting to Rs. 41,63,076. The activity in question involved the production of Electoral Photo Identity Cards and Bus Passes for APSRTC, which the Revenue categorized as Photographic Services. The appellant contested this classification, arguing that the process of taking photos for identity cards and bus passes did not align with the typical features of Photographic Services, such as maintaining a separate studio and capturing photos from various angles.

2. The Tribunal considered the definition of Photographic Services and observed that the preparation of photo identity cards, as undertaken by the appellant, did not squarely fit within this category. Photographic Services, in common understanding, involve activities like developing negatives, capturing photos from different angles, and photographing animate or inanimate objects in various states. However, in this case, only the face portion was directly photographed onto the identity card, which did not align with the typical scope of Photographic Services.

3. The appellant's counsel referenced a previous ruling involving CMC Ltd., where the Hyderabad Commissionerate had accepted the assessee's plea in a similar matter, leading to the rejection of the Revenue's stay application. Highlighting this discrepancy in the department's stance, the appellant sought full waiver of the pre-deposit. Considering the differing views within the department and the acceptance of the assessee's plea in the referenced case, the Tribunal granted the waiver, allowing the stay application and scheduling a common hearing with another appeal for a final decision on the matter.

This detailed analysis of the judgment addresses the issues of waiver of pre-deposit, the classification of the activity as Photographic Services, and the discrepancy in the department's view compared to previous rulings, providing a comprehensive understanding of the legal reasoning and decision-making process involved.