2008 (12) TMI 131 - AT - Service Tax

Whether the cost of photographic paper and chemicals would be included in the taxable value of photographic service appellant submits that they have filed appeal before the Commissioner (Appeals) against the order of the Assistant CCE, which is still pending. In the meantime, Commissioner of Central Excise revised the Original order and enhanced the penalty -Tribunal in the case of M/s. Jain Brothers and others following the decision of the Deluxe Colour Lab Pvt. Ltd. set aside the penalty - impugned order of Commissioner to revise the order of adjudicating authority by enhancing penalty is set aside

Summary

Issues: Appeal against enhanced penalty under Section 76 of Finance Act, 1994 for taxable value of photographic service including cost of photographic paper and chemicals.

Analysis:
1. Issue of Taxable Value: The appellant, providing photography services, contested whether the cost of photographic paper and chemicals should be included in the taxable value of the service. The Assistant Commissioner confirmed the tax demand and imposed a penalty of Rs. 7,000 under Section 76 of the Act. The appeal was filed before the Commissioner (Appeals), which was pending. The Tribunal's decision in the case of Deluxe Colour Lab Pvt. Ltd. and M/s. Jain Brothers set aside penalties in similar situations, providing a precedent for the appellant's case.

2. Enhancement of Penalty: The Commissioner of Central Excise revised the original order, increasing the penalty amount. However, the Tribunal found that the impugned order to enhance the penalty was not justified. Citing the decisions in previous cases, the Tribunal set aside the Commissioner's order to revise the penalty under Section 76 of the Finance Act, 1994. Consequently, the appeal was allowed, providing the appellant with consequential relief.

This judgment highlights the importance of considering precedents in similar cases to determine the appropriate taxable value and penalty under the relevant provisions of the Finance Act. The Tribunal's decision serves as a guide for future cases involving the inclusion of costs in taxable values and the imposition of penalties, ensuring consistency and fairness in tax adjudication processes.