2017 (12) TMI 614 - AT - Service Tax

Photography Service - production of Electors Photo Identity Cards (EPIC) in various districts of Tamil Nadu - whether the issue of EPICs can be considered as photography services? - Held that - The production of EPICs involve capturing of photographic images of identified electors, resizing of images, linking of images with the electoral rolls data base, printing of photo rolls as per Election Commission of India guidelines throughout the Districts of Tamil Nadu. That such production of EPICs would amount to production of goods - as per the Board s Circular No.167/18/95-CX4 dated 14.8.1995, the Board has clarified that the photo identity cards and holograms merit classification under Chapter 4901.90 of the CETA, 1985. Since the respondents were engaged by the Government of Tamil Nadu, for production of EPICs and not merely taking photographs of the voters, the activity would not fall under photography service. The activity carried out by the appellant would not fall within the definition of photography service - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against setting aside service tax demand, interest, and penalties for work related to production of Electors Photo Identity Cards (EPIC) in Tamil Nadu.

Analysis:
1. Issue of Service Tax Demand:
The appeal was filed by Revenue against the Commissioner (Appeals) order setting aside the demand of service tax, interest, and penalties imposed on the respondents. The dispute arose from the work undertaken by the respondents for the production of EPICs in various districts of Tamil Nadu. The department issued a show cause notice demanding payment of service tax, interest, and penalties. The adjudicating authority confirmed the demand, but the Commissioner (Appeals) held that the activities did not fall under the category of photography service, leading to the appeal by Revenue.

2. Interpretation of Photography Service:
The Revenue argued that the work undertaken by the respondents, which involved taking photos of voters, printing, and laminating them on EPICs, constituted photography services. The Revenue contended that as per the Finance Act, photography service includes various activities related to photography, and since the respondents were involved in capturing and printing images for EPICs, their principal activity fell under photography service and should be taxable accordingly.

3. Respondent's Position and Counter-Arguments:
The respondents, however, argued that their engagement was for the production of EPICs as per the government's directive, not merely for photography services. They highlighted that the entire process involved various steps beyond photography, such as resizing images, linking them with electoral data, printing, and laminating as per Election Commission guidelines. They emphasized that the contract was for the total production of EPICs, not just photography services, and that the Commissioner (Appeals) correctly analyzed the facts and law to determine that their activities did not amount to photography services.

4. Decision and Rationale:
After considering the arguments from both sides, the Tribunal concluded that the activities carried out by the respondents did not fall within the definition of photography service. The Tribunal upheld the Commissioner (Appeals) decision to set aside the demand, stating that the respondents were primarily engaged in the production of EPICs, which were classified as excisable goods under a specific chapter heading. Therefore, the appeal filed by Revenue was dismissed, and the cross-objection filed by the respondent was disposed of accordingly.

In conclusion, the Tribunal's judgment clarified the distinction between photography services and the production of EPICs, ultimately ruling in favor of the respondents and dismissing the Revenue's appeal against the service tax demand.