2008 (8) TMI 136 - AT - Service Tax

Includibility of cost of paper used in photography - Notification No. 12/2003-ST., exempted cost of materials from payment of service tax - it is found that the material cost and taxable amount were separately shown in all the relevant invoices as required under the impugned notification therefore matter is remanded to the original authority for fresh consideration of the documentary evidence and de novo adjudication

Summary

Issues involved:
Demand of differential service tax and penalty imposition based on inclusion of material cost in taxable value for photography service under Section 67 of the Finance Act, 1994.

Analysis:
The appeal in question pertains to a demand of differential service tax and penalty amounting to Rs. 4,31,586/- for the period from October 2004 to March 2005. The issue revolves around whether the cost of materials used by the appellants in providing photography services should be considered in the taxable value for service tax payment. The appellants claimed exemption under Notification No. 12/2003-ST, dated 20-6-2003, which exempted material costs from service tax payment, provided the value of goods and materials used was separately indicated in the invoices. The lower appellate authority denied the benefit of the Notification due to lack of sufficient proof in the invoices. However, upon examination of specimen invoices presented by the appellants, it was evident that the material cost and taxable amount were distinctly mentioned, meeting the requirements of the Notification. Consequently, the Tribunal found no reason to reject the appellant's claim and remanded the case to the original authority for a fresh assessment based on the documentary evidence provided. The orders of the lower authorities were set aside, and the appeal was allowed for reconsideration, ensuring the appellant's right to a fair hearing.

This judgment highlights the importance of complying with notification requirements for claiming exemptions under the law. It underscores the necessity of providing clear documentary evidence, such as detailed invoices, to substantiate claims of exemption from service tax based on material costs. The Tribunal's decision to remand the case for fresh consideration emphasizes the need for a thorough review of evidence by the original authority to ensure a just and accurate adjudication. The principle of natural justice is upheld through the directive for the appellant to be granted a reasonable opportunity to present their case during the reassessment process. Overall, the judgment underscores the significance of adherence to legal provisions and the importance of proper documentation in tax-related matters to avoid disputes and ensure fair treatment under the law.