2007 (12) TMI 136 - AT - Service Tax

Activity of preparing identity cards for the electors for purpose of election on behalf of Election Commission of India - Revenue proceeded to consider the activity to come within the ambit of Photography Services assessee s contention that the issue of identity cards was a sovereign function in terms of the Constitution of India and the same cannot be brought within the ambit of Service Tax, is sustainable - issue is fully decided in assessee s favour - no merit in this appeal so rejected

Summary

Issues: Revenue appeal against Order-in-Appeal setting aside demands of Service Tax on the respondents for preparing identity cards for electors on behalf of the Election Commission of India.

Analysis:
1. The appeal was filed against the Order-in-Appeal No. 2/2007 setting aside the demands of Service Tax on the respondents for preparing identity cards for electors on behalf of the Election Commission of India. The Revenue considered the activity to fall under 'Photography Services,' but the assessee argued that issuing identity cards was a sovereign function and not subject to Service Tax. The Commissioner (A) upheld the assessee's plea, leading to the Revenue's appeal.

2. The learned Consultant referred to a similar case where the Tribunal dismissed Revenue appeals and allowed parties' appeals, ruling that Service Tax was not applicable to photo identity cards prepared for the Election Commission of India. The Final Order dated 23-7-2007 supported the contention that Service Tax was not leviable on such cards.

3. The department, represented by the Joint Commissioner, contended that they did not accept the Tribunal's ruling in the cited case but acknowledged that the matter was under appeal. However, there was no stay order against the Final Order supporting the assessee's position.

4. The Tribunal considered the previous Final Order related to a similar case and held that preparing elector photo identity cards did not fall within the scope of photographic services under the Finance Act. Citing precedents and applying relevant sections of the Act, the Tribunal found in favor of the assessee, upholding the Commissioner (A)'s order as legal and proper. The appeal was deemed meritless and rejected accordingly.