2008 (11) TMI 30 - AT - Service Tax

Photography lab and undertakes job of various works relating to photography - whether the services rendered by the respondent to the studios/professional photographers/free lancers will also attract service tax at the hands of the respondent whether studios/free lancers and professional photographers cannot be treated as customers - appeal is allowed by way of remand to the adjudicating authority to consider the entire issues afresh after granting reasonable opportunity of hearing

Summary

Issues:
Whether services rendered by the respondent to studios/professional photographers/free lancers attract service tax.
Validity of the order passed by the original authority and Commissioner (Appeals).
Applicability of ST Circular No.37/5/01 dated 27.12.2001.
Correctness of the Commissioner (Appeals) decision to set aside the order without granting an opportunity for fresh adjudication.

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI pertained to the service tax liability of a photography lab providing services to studios, professional photographers, and free lancers. The main issue was whether the services rendered to these entities also attract service tax. The original authority confirmed the service tax liability on the respondent and imposed penalties. However, the Commissioner (Appeals) set aside the order, noting that the original authority did not discuss the expert reports and certificates submitted by the respondent, thereby rendering the order non-speaking.

The Commissioner (Appeals) held that studios, professional photographers, and free lancers cannot be considered as customers, relying on certificates showing their registration and payment of service tax under the category of photographer. The respondent's advocate argued that these entities act as collection centers and are not required to pay service tax based on a relevant circular. The Departmental Representative contended that the Commissioner (Appeals) erred in not remanding the matter to the original authority for rectification.

The Appellate Tribunal observed that the Commissioner (Appeals) correctly pointed out the deficiency in the original authority's order for not being a speaking order. Consequently, the Tribunal set aside both the Commissioner (Appeals) and original authority's orders, remanding the matter to the adjudicating authority for fresh consideration. The Tribunal clarified that all issues are open for reconsideration and that no opinion on the case's merits was expressed. Ultimately, the appeal was allowed by way of remand, emphasizing the need for a proper opportunity for hearing and adjudication.