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TMI Blog2016 (3) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to legislative intent of taxing the rendering of that service only with effect from 16th June 2005. The later order in the matter of M/s Sai Mailing Service was decided without taking into account the benefit of enlightenment in the form of the order in the matter of M/s United Mailing Service and has, therefore, erred in upholding the decision of the lower authority for the demand prior to 16 th June 2005. The transaction of franking or usage of the postal service is solely between the appellants and the post office with the former as the customer of the latter. The depiction of the latter as a client is not consistent with this reality and the categorization under section 65(19)(vi) fails the test of rationality. Demand p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Postal Department and taxable since 1 st July 2003. 3. In the case against M/s United Mailing Services, the demand in relation to franking was held to be chargeable on the commission/rebated of ₹ 4,17,601 received from the Department of Posts between 1 st July 2003 and 31 st March 2006 while the demand in relation to the other sub-category was held to be chargeable on receipts of ₹ 1,72,266. It was also held that they registered themselves as service provider on 26 th November 2004 and started charging tax on the bills raised on clients from 17 th December 2004 but deposited an amount of ₹ 23,629 only from March 2005. Besides the confirmation of demand of ₹ 54,164 and interest thereon, penalties were impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 th July 2005 and taxing that very service under any other entry that existed till then is an act of overreach contrary to legislative intent of taxing the rendering of that service only with effect from 16 th June 2005. The later order in the matter of M/s Sai Mailing Service was decided without taking into account the benefit of enlightenment in the form of the order in the matter of M/s United Mailing Service and has, therefore, erred in upholding the decision of the lower authority for the demand prior to 16 th June 2005. 8. We note the attempt to tax the rebate/commission received from the Department of Posts in the hands of the appellants and the manner in which the appellate authority has handled the matter. Both the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct with the appellants do not approach the post office for any service. This has been acknowledged by the original and appellate authorities in accepting the reimbursements as precisely that; they ignored this finding of theirs and merely concerned themselves with deeming the rebates as the consideration obtained by the appellants from the post office. The appellants have the status of bulk mailers in relation to the post office and, as is the usual practice in dealing with bulk customers, franking machines are offered as a facility instead of being made to purchase stamps at the vending counter and affixing them on the postal articles. Rebates are offered as an incentive for the reduced workload on the post office staff. Such a rebate can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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