9911796707
TMI Blog2018 (6) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... n mail the documents/packets concerned. For this activity, appellants collected certain service charges from the clients. The appellants were discharging tax liability in respect of service charges received from their clients with effect from 16.06.2005, namely, from the date from which "Mailing List Compilation and Mailing Services" became taxable under the Finance Act, 1994. 2. In respect of franking cost, the clients take out demand drafts in favour of the Post Master General. In some cases, appellants pay the franking cost on behalf of their customers, however, get it reimbursed from the latter subsequently. Appellants also receive a rebate of 3% on the franking charges from postal department. Department took the view that these activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icensed franking machines. (ii) As per Section 17 (2) of the Indian Post Office Act, 1898 postage franked through Franking Machine is a statutory levy and therefore it cannot be considered as a consideration for the purpose of Section 67 of the Finance Act, 1994 as amended to impose Service tax. (iii) The clients of the Appellant had taken the demand draft for the franking charges directly in the name of Post Master General and the same cannot be considered as a consideration. (iv) In case of the shortage if any in the franking charges the Appellant takes a DD in favour of the postmaster general and is reimbursed by the client. (v) As there is nothing flowing from the service recipient to the service provider there is no question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scope of the said Sections. (ix) The postal department gives the rebate to encourage the use of franking machine and there is no service provider-client relationship between appellant and the post office and according to the Memo of the postal department, the 3% rebate for the use of the franking machines is an "independent concession". Franking machine is used to avoid pasting of postage stamps, avoid pilferage and thereby make the work much convenient and easier way. 4. On the other hand, Ld. AR supports the impugned order. 5. Heard both sides. 6. It is not disputed that the costs related to franking are paid directly to the Post Master General by the appellant's clients or are otherwise paid by the appellant and subsequently, reim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y approach in the two impugned orders situated in identical circumstances by the same appellate authority. The more specific taxable service of 'mailing list compilation and mailing' was notified only from 16th 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 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 16th June, 2005. 8. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mailing. The entire activity of dispatch is effected by the appellants on behalf of the business entities and the appellants re, therefore, the users of the post office. The business entities that contract 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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