2011 (5) TMI 457 - AT - Service Tax

Waiver of pre-deposit - benefit of Notification No.12/2003-ST dated 20.06.2003 - cost of materials and goods used in photography service was allowed as abatement from the gross taxable value of the service or not - Assessee pointed out in the case of Agarwal Color Advance Photo System the regular Bench referred the conflict of views to a Larger Bench. The learned counsel submits that, in view of the debatability of the issue as indicated by the reference to Larger Bench, the appellant may be granted waiver and stay -R submits that the appellant has not denied their tax liability and has only claimed the benefit of the Notification - Therefore, the appellant should be directed to pre-deposit a reasonable amount

Issues:
1. Applicability of Notification No.12/2003-ST dated 20.06.2003 on photography services.
2. Validity of invoking Section 84 during the pendency of an appeal.
3. Benefit of abatement of cost of goods and materials from the gross taxable value of the service.
4. Conflict of views between different tribunal decisions.
5. Granting waiver and stay based on the debatability of the issue.
6. Requirement of pre-deposit by the appellant.

Analysis:

1. The judgment revolves around the applicability of Notification No.12/2003-ST dated 20.06.2003 on photography services provided by the appellant. The demand of duty was raised due to the denial of benefit under this notification, which exempted materials and goods used in the service from the gross taxable value. The appellant did not pay Service Tax or register with the Department as a photographic service provider. The original authority confirmed the demand, leading to an appeal with the Commissioner (Appeals) and a subsequent show-cause notice seeking to revise the order.

2. The issue of invoking Section 84 during the pendency of the appellant's appeal was raised. The revisionary authority's action was questioned for invoking this section, which the appellant argued was not authorized by law. However, the focus was shifted towards dealing with the merits of the case rather than delving into this controversy.

3. The appellant sought the benefit of abatement of the cost of materials and goods from the gross taxable value based on a precedent case, Shilpa Color Lab Vs. Commissioner of Central Excise, Calicut. On the contrary, a different view was presented in Agrawal Colour Advance Photo System Vs. Commissioner of Central Excise, Bhopal. The conflicting decisions led to a reference to a Larger Bench, indicating the debatability of the issue.

4. The conflicting views between the two tribunal decisions were highlighted, with one case allowing abatement and the other presenting a contrary view. The dismissal of the Civil Appeal filed by the Department against the decision in Shilpa Color Lab's case by the apex court was also noted.

5. The appellant requested a waiver and stay based on the debatability of the issue due to the conflicting tribunal decisions. The appellant's counsel emphasized the need for waiver and stay, considering the reference to the Larger Bench due to the conflicting views.

6. The judgment concluded by directing the appellant to pre-deposit a reasonable amount of Rs.7.5 lakhs within four weeks. This pre-deposit requirement was based on the submissions, facts, and circumstances of the case, ensuring compliance by a specified date.

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