2007 (9) TMI 90 - AT - Service Tax

Sale of certain goods during the course of rendering Photographic service Valuation Deduction of, the value of material sold and consumed during the course of providing the service is allowable, from the gross taxable value of services Appellate authority s order is sustainable

Summary

Issues:
1. Whether the cost of materials sold during the provision of taxable services is includible in the value of taxable services.

Analysis:
1. The appeal concerned the inclusion of the cost of materials sold during the provision of taxable services in the value of taxable services. The respondent, engaged in photography services, argued that certain materials sold during service provision should not be included in the taxable value as per Section 67 and Notification No. 12/2003. The Commissioner (Appeals) allowed the appeal by remand, directing deductions if supported by relevant bills or proof of material value consumed.

2. The Revenue contended that the respondent was not eligible for deductions without proper documentary proof to support their claim.

3. The respondent's counsel referenced previous judgments where similar issues were decided in favor of the assessee. The Bench had previously ruled in favor of deductions for material costs in cases like Shilpa Colour Lab, Digi Photo Laser Imaging, and M/s. Suvi Color Fotos & Anr.

4. The Tribunal, after careful consideration, noted that the issue had been addressed in previous judgments cited. As the Commissioner (Appeals) had correctly decided the issue and the judgments' ratio applied to the present case, the appeal was rejected. The Tribunal found no merit in the appeal and upheld the decision in favor of the respondent.

This judgment clarifies the treatment of material costs sold during the provision of taxable services, emphasizing the importance of documentary proof to support deductions and referencing past decisions to establish consistency in rulings.