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2019 (6) TMI 511 - AT - Service TaxValuation - photography services - inclusion of value of material in assessable value - period 16.07.2001 to 31.03.2004 - HELD THAT - The issue with reference to the inclusion of value of material in view of the provision of service, stands decided in favour of Revenue in the Larger Bench decision of the Tribunal in the case of AGGARWAL COLOUR ADVANCE PHOTO SYSTEM VERSUS COMMISSIONER OF CENTRAL EXCISE, BHOPAL 2011 (8) TMI 291 - CESTAT, NEW DELHI (LB) - decided in favor of Revenue. Extended period of limitation - HELD THAT - Tribunal s decision in the case of M/S. TRUVISION COLOUR LAB VERSUS C.C.E., INDORE 2016 (12) TMI 286 - CESTAT NEW DELHI wherein, in identical circumstances, it was held that the longer period of limitation would not be available to the Revenue - the appellant will be entitled to bonafide belief and longer period of limitation will not be available to the Revenue to raise the demand in this case. The show-cause notice dated 08.08.2006 has been issued for demand of service tax for the period 16.07.2001 to 31.03.2004. Consequently, no demand will survive within the normal period of limitation. Appeal allowed - decided in favor of appellant.
Issues Involved:
- Alleged irregularities in payment of service tax for the period 2001-2004 - Applicability of abatement under Notification No.12/2003 - Validity of the demand for service tax, interest, and penalties - Availability of longer period of limitation for raising the demand Analysis: Alleged Irregularities in Payment of Service Tax (2001-2004): The appellant, engaged in providing photography services, was found to have not paid service tax properly during the period 16.07.2001 to 31.03.2004. The Department identified three specific irregularities: 1. Failure to include the entire amount of developing and printing charges collected for payment of service tax, resulting in a short payment of &8377; 6,41,842. 2. Discrepancy in the amount of charges collected by the appellant as per the balance sheet and as declared for service tax payment, leading to a short payment of &8377; 29,000. 3. Disallowance of abatement under Notification No.12/2003 for the value of goods and materials consumed in providing services, with a service tax liability of &8377; 3.69 lakhs. Applicability of Abatement under Notification No.12/2003: The appellant sought to avail abatement under Notification No.12/2003 for the value of materials consumed in providing photographic services. The consultant argued that although a similar issue was decided against the appellant in a previous case, the benefit of time bar should apply due to the disputed nature of the abatement issue until a subsequent decision clarified it. The consultant also referenced a case where the Tribunal extended the benefit of bonafide belief in a similar situation. Validity of Demand for Service Tax, Interest, and Penalties: Following a show-cause notice in 2006, the original authority upheld the demand for the differential service tax, along with interest under Section 75 and penalties imposed under various sections of the Finance Act, 1994. The case underwent denovo proceedings before the Tribunal, resulting in the demand for service tax being upheld. Availability of Longer Period of Limitation for Raising the Demand: The main issue revolved around the invocation of the longer period of limitation by the Revenue for raising the demand. The Tribunal, citing precedents, concluded that the appellant was entitled to a bonafide belief, and the longer period of limitation was not applicable in this case. As the show-cause notice was issued for a period beyond the normal limitation, the demand raised for the specified period was set aside, leading to the appeal being allowed and the impugned order being overturned.
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