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Whether abatement for materials consumed in the photography
service is to be allowed and only the service portion is to be taxed?
Held : Yes
The dealer is engaged in the business of Photography and
during the course of rendering such service, they also sell certain
materials/goods that are consumed. Their contention is that provisions of
section 67 specifically provides that cost of unexposed photography films,
unrecorded magnetic tapes or such other storage devices sold during the course
of providing the taxable services would not form part of the value of taxable
services. They also referred to the terms of Notification No. 12/2003-S.T.
dated 20-6-2003 which laid down that the cost of material used/sold while
rendering the service were not includible in the value of the taxable service.
The Commissioner (Appeals) allowed the appeal of the
assessee and held that only the service portion after allowing the deduction
for materials sold and consumed in the course of providing service should be
taxable.
The department went before the Tribunal and contented that
deduction as claimed by the dealer should not be allowed in the absence of any
documentary proof.
The dealer contended that the issue is already decided in
favour of the dealer in the following cases:
-
Shilpa Colour Lab vs. CCE,
Calicut 2007 (5) STR 423 (Tri Bang)
-
Digi Photo Laser Imaging (P)
Limited vs. CC& CE, Kochi 2007- TIOL-1169-CESTAT-Bang
-
M/s Suvi Color Fotos & Anr vs.
CCE, Kochi-2007-TIOL-1271-CESTAT-Bang
The Tribunal concluded that the ratio of the judgments
quoted above were fully applicable to the facts of the case.
The department's appeal was dismissed.
[CCE Mysore vs. Express Colour Lab 9 STR 126 (Tri Bang)]
-
Whether transport under a contract where amounts are
received for each trip based on distance is covered under Rent-a-Cab service
for the relevant period?
Held : No
The appellant dealer owns two tempos and a motor car and an
ambassador car. He is rendering service of transporting newspaper for M/s
Manipal Media Network Ltd.
The department proceeded against the dealer for not
discharging liability under Rent-a-Cab service, since the appellant had
registered the vehicles with the transport authorities as taxi cab.
The dealer's consultant relied upon the decision of
Tribunal in case of Kuldeep Singh Gil vs. CCE Jalandar. 3 STR 689 TRI Delhi.
Wherein under similar circumstances it was held that
transport operation under contract in which amounts are received for each trip
depending on distance, time etc. would not come under the category of
Rent-a-Cab service.
The Tribunal held that there is no evidence to show that
vehicles have been rented out to service recipients.
The appellant had maintained trip sheets and the service
recipient had paid to the assessee appellant on the basis of trip made.
In view of these facts and the decision quoted hereinabove,
the Tribunal allowed the appeal of the assessee appellant.
[Ganesh Maniyani vs. CCE Mangalore. 9 STR 152 (Tri
Mangalore.)]
-
Whether technical testing and analysis undertaken of
electricity meters by a unit set up by Government would be liable to service
tax under technical testing and analysis service?
Held : No in a stay matter
The Government of Karnataka set up a unit to carry out the
activity of testing of electricity meters.
The appellant dealer is referred to as Chief Electrical
Inspector.
The department proceeded against the appellant for the
purpose of levy of service tax under the activity of Testing and Analysis
service.
In a stay petition before the Tribunal it was contended
that the issue is covered in favour of the appellant dealer and referred to
the following:
Central Power Research Institute vs. CCE Bangalore-III-2006
(3) STR 637 (Tri Bang) wherein similar circumstances the Board circular in
F-B-11/1/1/2001-TRU, dated 9-7-2001 has been applied and benefit has been
extended. He also refer to the Apex Court judgment rendered in the case of
Suchitra Components Ltd. vs. CCE, Guntur – 2007 (208) ELT 321 (S.C) wherein
the benefit of the circular has been given retrospectively.
The Tribunal agreed with the contention raised by the
counsel of the appellant dealer and waived the pre deposit.
[Electrical Inspectorate vs. Commissioner of Income Tax
Bang. 9 STR 154 Tri Bang]
-
Whether Yoga Shibir conducted by a charitable trust would
be liable to be taxed under Event Management service where no service of
commercial activity brought on record?
Held : No
The Revenue were in appeal before the Tribunal on the
question as to whether money collected as Event Manager by Mahabir
International shall be taxable.
It was brought out before the Tribunal that M/s Mahabir
International was a charitable trust. It enjoyed exemption under Income Tax
Law as it was carrying out charitable activity and public utility service for
no profit. It had arranged a Yoga Shibir at Siliguri, which was conducted by
Swami Ramdev of Divya Yog Mandir Trust.
It was contended that such a service was not an Event
Management service and no consideration was received towards the Yoga Camp.
The entire money recovered from tickets amounted to Rs 2,50,00,000/- (Two
crore fifty lakhs) was given to the trust of Swami Ramdev and nothing was
received from Divya Yoga Trust.
Since there was no gross value received for any commercial
service, no service tax would be payable.
The Tribunal confirmed that there was no evidence brought
out by the revenue to prove its allegation that the appellant had realized Rs.
2,50,00,000/- (Two crore fifty lakhs) from Divya Mandir Trust in relation to
Event Management.
In the absence of any evidence proving commercial activity
and receipt of gross value from such activity, the department cannot tax
arbitrarily on the value of tickets.
[CCE Siliguri vs. Mahabir International 9 STR 162 (TRI
Kolkata)]
-
When records indicate no collection of service tax
separately, whether benefit of CUM-Tax value is grantable ?
Held : Yes
The assessee rendered security services to the client.
The department proceeded against the assessee and demanded
service tax along with interest.
The Commissioner (Appeals) held that the assessee were
liable to payment of service tax. However, since the assessee did not collect
any service tax from the client, the Commissioner granted the benefit of CUM
Duty principle relying on the decision of CCE vs. Maruti Udyog Ltd. 141 ELT 3.
The department proceeded against the order before the
Tribunal.
The Tribunal confirmed the order of the Commissioner
(Appeals) and rejected the department’s plea holding that the reliance placed
on the case M/s Maruti Udyog Ltd was valid.
[CCE Bangalore vs. Prompt and Smart Security 9 STR237
(Tri-Bang)]
-
Whether CENVAT credit can be utilized for payment of
service tax on Goods Transport Agency Service by recipient?
Held : Yes
The assessee is manufacturing cotton yarn/fabrics and
availing facility of Cenvat credit. According to the Revenue, the liability in
respect of ‘Good Transport Agency’ services was required to be discharged by
the respondent by cash, because recipient of such service was liable to pay
the tax. The liability to pay Service tax, in respect of GTA services
received, could not be discharged by utilizing Cenvat credit of manufacturing
activity.
The CIT Appeals allowed the claim of the assessee.
The Revenue proceeded against the order before the
Tribunal.
The department before the Tribunal strongly contended that,
the provisions of Rule 2(p) were applicable only in a case, where a person
liable for paying service tax was neither a taxable service provider nor a
manufacturer and, therefore, there was no scope for extending the benefit of
the explanation to Rule 2(p) of the said Rules to the appellant. He also
relied upon the Departmental clarification issued by a master CBEC Circular
No. 97/8/2007-S.T. dated 23-8-2007 clarifying the procedural issues relating
to Service Tax, published in 2007 (215) E.L.T T-24 (Part-I), at page T-29, in
which it was clarified, in response to the issue, whether a manufacturer or
taxable service provider, having credit balance in his account, can utilize
that credit for payment of Service Tax on goods by road, as a consignor or as
a consignee by answering that the service provided by a GTA, for which the
consignor or consignee may be liable as the recipient to pay Service tax, does
not become an output service for such consignor or the consignee and,
therefore, the Service Tax payable by the consignor or consignee on
transportation of goods by road cannot be paid through credit accumulated by
such consignor or consignee.
On behalf of the dealer the arguments of the department
were countered and reliance was placed on the Division Bench decision of India
Cement Ltd vs. CCE. 7 STR 569 Tri Delhi
The Tribunal respectfully following the ratio of the
Division Bench in the case of India Cement Ltd. dismissed the appeal of the
Revenue.
[CCE, Chandigarh vs. Nahar Exports Ltd. 9 STR 252
(Tri-Del)]
