2018 (8) TMI 1113 - AT - Service Tax

Valuation - Photography Service - deduction of cost of goods used/consumed in the Photography Service - N/N. 12/2003 ST dated 20.06.2003 - Held that - The issue is covered by the decision in the case of Shilpa Color Lab V. CCE 2006 (10) TMI 35 - CESTAT,BANGALORE , where it was held that Service tax is only imposable in the amount charge for services not other than services - appeal dismissed - decided against Revenue.

Summary

Issues:
- Disallowance of deduction/adjustment claimed by the appellant in respect of goods consumed while providing service under Notification No. 12/2003 ST dated 20.06.2003.
- Appeal filed by the Revenue against the order of the Commissioner (Appeals) allowing the appellant's appeal.
- Interpretation of the exemption under Notification 12/2003 ST dated 20.06.2003 and the requirement of producing documentary evidence for claiming the exemption.
- Application of the decision in the case of Shilpa Color Lab Vs. CCE, Calicut in determining the liability to pay service tax for the value of taxable services.

Analysis:
The present appeal before the Appellate Tribunal CESTAT Bangalore involves a dispute regarding the disallowance of the deduction/adjustment claimed by the appellant in respect of goods consumed while providing the Photography Service under Notification No. 12/2003 ST dated 20.06.2003. The Commissioner (Appeals) set aside the order of the Additional Commissioner and allowed the appellant's appeal, leading to the Revenue filing an appeal against this decision. The core issue revolves around the interpretation of the exemption under Notification 12/2003 ST dated 20.06.2003, which requires the production of documentary evidence to claim the exemption. The adjudicating authority disallowed the deduction claimed by the appellant, emphasizing the necessity of providing evidence that the cost of material is sold to customers to avail the exemption.

During the hearing, the Revenue contended that the impugned order allowing the appellant's appeal is not sustainable in law. The Revenue argued that the decision in the case of Shilpa Color Lab, relied upon by the Commissioner (Appeals), has not attained finality as a Civil Appeal has been filed before the Apex Court. However, the counsel for the appellant countered this argument by highlighting the dismissal of the Department's appeal by the Apex Court. Moreover, the counsel for the appellant referenced various decisions, including Shilpa Color Lab, to support the contention that the value of goods and material consumed during the provision of Photography Service should not be included in the value of service under Section 67 of the Finance Act 1994.

After considering the submissions and reviewing the material on record, the Tribunal upheld the decision of the Commissioner (Appeals) based on the precedent set by the case of Shilpa Color Lab, which was affirmed by the Supreme Court. The Tribunal found that the other decisions cited in favor of the appellant also supported the appellant's position. Consequently, the Tribunal dismissed the appeal of the Revenue, affirming the order of the Commissioner (Appeals) and emphasizing the consistent application of legal principles across relevant cases.