2013 (12) TMI 1125 - AT - Service Tax

Waiver of pre deposit - Benefit of Notification No.12/03 - value of materials tobe sold while providing the service - Benefit of exemption notification given till such time their business was treated as small-scale unit i.e., upto 2008, and, therefore, they were not paying service tax - Held that - demand is issued invoking the extended period of time and in such a situation, where there was considerable confusion regarding actual position. In fact, there was a circular from CBEC to that extent that service tax may be levied in case of photographic services for the value of service rendered - Assessee directed to make a pre deposit - Decided against assessee.

Summary

Issues:
1. Claim of benefit under Notification No.12/03 for value of materials sold.
2. Dispute over whether materials used in providing photographic service should be included in the value of service.
3. Show Cause Notice for service tax short-levied during a specific period.
4. Applicability of CENVAT credit if exemption under Notification No.12/03 is denied.
5. Decision on demand invoking the extended period of time due to confusion regarding the actual position.

Analysis:
1. The applicant, engaged in color processing lab business, sought the benefit of Notification No.12/03 for the value of materials sold while providing services. The Revenue contended that materials used in photographic services should be part of the service value, leading to a Show Cause Notice for service tax short-levied during a period.

2. The Tribunal considered the dispute, noting the Revenue's reference to a ruling by the Larger Bench in a specific case. The applicant's counsel relied on previous Tribunal decisions to support their argument regarding the benefit claimed under the notification. The issue revolved around whether the materials used in the service provision could be considered as sold in the course of service delivery.

3. The Tribunal acknowledged the confusion surrounding the issue, especially considering a circular from the CBEC regarding the levy of service tax on photographic services. Consequently, a demand was made invoking the extended period of time, prompting the Tribunal to direct the applicant to make a pre-deposit within a specified period.

4. Additionally, the applicant raised the point of eligibility for CENVAT credit if the exemption under Notification No.12/03 was denied. This aspect was presented by the applicant's counsel for consideration alongside the main issue of the disputed benefit claim under the notification.

5. In conclusion, the Tribunal's decision highlighted the complexity of the situation due to conflicting interpretations and directed the applicant to comply with the pre-deposit requirement. The judgment aimed to address the uncertainty prevailing regarding the treatment of materials in photographic services and the related service tax implications during the specified period of dispute.