Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Dept. Can’t Classify Product as Zarda Scented Tobacco After Repeatedly Approving It As Chewing Tobacco: CESTAT *  Mere Uploading Of GST Order On Portal Is Not “Valid” Service: Tripura HC *  CGST Can Proceed Even If SGST Closed Similar Case Earlier: Delhi HC *  SC upholds 28% GST on online gaming with retrospective effect. *  West Bengal Govt cuts E-way Bill Threshold limit to Rs. 50,000 for intra-state goods movement. *  Criminal Prosecution Under Central Excise Act Can’t Continue After CESTAT Sets Aside Duty Demand on Merits: Punjab & Haryana High Court. *  Madras High Court Quashes GST Assessment Orders for Denial of Personal Hearing; Remands Matter Subject to 10% Deposit *  Ex Parte GST Order: Madras High Court Directs Immediate Removal of Bank/ITC Attachment Upon 25% Deposit *  J.K. Cement Receives GST Demand Order of Rs 8,02,113/- from Ahmedabad Tax Authority *  Delhi Police EOW Busts Alleged Rs. 128 Crore GST Fake Invoice Network. *  REPLY TO SCN CAN’T BE TREATED AS “EMPTY FORMALITY”: ORISSA HIGH COURT QUASHES GST DEMAND OF RS. 57.30 LAKH *  Challenge to CGST Provisions restricting ITC to Bonafide Purchasers : Allahabad HC issues notice *  CBIC Notifies Revised Customs Tariff Values for Edible Oils, Gold, Silver, Brass Scrap and Areca Nuts *  Delhi HC Orders Removal of GST Attachment After Statutory 1 Year Period Expired *  GSTAT Extends Relaxed Appeal Filing Guidelines till December 31, 2026 *  AO fails to Provide Import - Export Data from DGFT to Taxpayer for Reconciliation *  Gold, Silver Imports To Get Costlier As Govt Raises Customs Duty To 10%  *  GSTAT Enables Pre-Payment Access to Document Upload and Checklist for GST Appeal Filing *  GST Portal Restrictions Can’t Override Statute: Gujarat HC Allows Cross-State Transfer Of CGST ITC After Amalgamation *  Centre Revises HS Codes for Large Diameter Steel Pipes Used in Oil & Gas Pipelines *  Customs Duty Liability Arises On Warehouse Clearance Date: Supreme Court *  Government lifts export ban on de-oiled rice bran *  CESTAT Grants 12% Interest on Pre-Deposit for Investigation from Date of Deposit till Refund and Denies Interest on Interest. *  Government Overhauls GST Classification Framework for Non-Alcoholic Beverages; Fruit Juice Drinks, Milk-Based Beverages and Caffeinated Drinks to Attract Revised 5% and 40% GST Rates from May 1, 2026 *  India’s gross GST collections hit a record Rs 2.42 lakh crore in April, up 8.7% *  Customs clearance stalled, revenue hit over MRP dispute *  Shipping Corporation explores Middle East routes as Hormuz tensions disrupt cargo movement *  India, Kenya signs MoU for exchange of pre-arrival customs information *  No demand of Taxes under Reverse Charge if Tax Already Discharged by Service Provider under forward charge *  The India-New Zealand Free Trade Agreement, signed "once-in-a-generation" deal that eliminates tariffs on 100% of Indian exports to New Zealand
Subject News *  Consignment Sales Can’t Be Reclassified as Inter-State Sales Based on Pre-Agreement Evidence: CESTAT *  Exporter Can’t Be Denied Advance Authorization Benefit Due To ICEGATE Technical Glitch: Delhi High Court *  No GST Demand For Mere Wrong Set-Off Of IGST Credit Under CGST And SGST Heads: Kerala HC. *  Cenvat Credit Can’t Be Denied on Input Services Having Nexus With Manufacturing Activities: CESTAT *  Pending Proceedings Can’t Survive Without Saving Clause: Calcutta High Court Quashes GST Demand of Rs. 6.28 Crore After Omission of Rule 96(10) *  Madras HC Quashes GST Demands on TASMAC (Tamil Nadu State Marketing Corporation) Bar Licence Fee *  GST Proceedings Cannot Survive Omitted Rule Without Saving Clause: Calcutta HC *  Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT *  Businesses Should Not Be Kept Outside GST Regime Without Due Process: Gauhati High Court *  Punjab & Haryana HC Directs Reconsideration of Contractors’ Claim for Additional GST Payment After Tax Rate Hike From 12% to 18% *  S. 108 Statements Can’t Be Sole Basis Without Following Section 138B Procedure: CESTAT *  Bombay High Court Frames Key Questions on Mandatory Distribution of ITC U/s 20 CGST Act *  Filing of Annexure-B for Refund Applications involving Accumulated ITC using the offline utility in GST portal: GSTN *  No Service Tax on Parent Company’s Un-Invoiced Cost Allocations Without Actual Service or Consideration: CESTAT  *  Calcutta High Court Upholds GST Classification of Polypropylene Leno Bags as Plastic Products *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  GSTAT Issues Major Bench Allocation Framework; All Appeals to First Go Before Division Bench *  ITC Blocking Without Reasoned Order Violates Rule 86A; Punjab & Haryana HC Directs Release of Credit *  Allahabad HC Refuses Bail to CGST Superintendent In Rs. 70 Lakh Bribery Case *  S.130 Can’t Be Invoked Without Prior Tax Determination U/s 73/74: Allahabad High Court Quashes GST Confiscation Proceedings *  SC grants Bail to Rs 54cr GST case  *  Karnataka HC Sets Aside Duplicate GST Orders, Orders Fresh Hearing on GSTIN Cancellation *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  Transfer Of Unutilized ITC After Amalgamation - Supreme Court Issues Notice *  PUNJAB & HARYANA HC QUASHES GST CANCELLATION NOTICE FOR FAILURE TO PROVIDE CBIC ENQUIRY REPORT *  LICENSE FEE, TECHNICAL ASSISTANCE CHARGES NOT INCLUDIBLE IN CUSTOMS VALUE UNLESS THEY ARE A CONDITION OF SALE: CESTAT *  DELHI HC ORDERS REMOVAL OF GST ATTACHMENT AFTER STATUTORY 1 YEAR PERIOD EXPIRED *  CUSTOMS BROKER CAN’T BE FAULTED JUST BECAUSE EXPORTER’S GST REGISTRATION WAS PREVIOUSLY CANCELLED: CESTAT   *  Supreme Court Dismisses Review Plea Against Delhi HC Ruling Holding Real Operator Behind Fake GST Firms Liable As ‘Taxable Person  *  GST Appeal Can’t Be Rejected Merely Because DRC-07 Was Not Uploaded On Portal: Bombay High Court  

Comments

Print   |    |  Comment

PJ/Case Law /2016-17/3370

whether service provider liable to service tax for carrying works of preparation of Elector’s Photo Identity Card?

Case:-INSTRUMENTATION LTD. VersusCOMMISSIONER OF C. EX. & S.T., LUCKNOW
 
Citation:-2016 (45) S.T.R. 182 (Tri. - All.)
 
Issue:- whether service provider liable to service tax for carrying works of preparation of Elector’s Photo Identity Card?
 
Brief facts:-The issue in this appeal was whether the appellant, being a service provider, liable to service tax for carrying works of preparation of Elector’s Photo Identity Card (EPIC), i.e., Matdan Pahchan Patra. SCN was issued on the appellant as it appeared to Revenue that the appellant was providing photography service under Section 65(78) of the Finance Act, 1994 w.e.f. 16-7-2001, when tax on photography service was introduced and the service was defined as:
“‘Photography’ includes still photography, motion picture photography, laser photography, aerial photography and fluorescent photography and”
Further, Section 65 (79) of the Act defines as under:
“‘Photography studio or agency’ means any professional photographer or any person engaged in the business of rendering service relating to photography”.
The appellant had entered into an agreement dated 9-3-2003 with the Governor of State of Jharkhand for preparation of EPIC, which involved photography and the same appeared to be taxable service, for which, the appellant had received service charges from the State of Jharkhand during the period from 2003-04 to 2006-07. Similar services were also provided in the States of Uttarakhand & Madhya Pradesh. The appellant was already a registered dealer under the Service Tax provisions and was filing the returns regularly and had paid the admitted service tax in respect of maintenance and repair services, commissioning and installation services.
The appellant contested the SCN among other grounds stating that their activity of preparation of EPIC was not a taxable activity as the said activity was sovereign activity of the State or the Union and hence, was not taxable under the provisions of Sections 65(78) and 65(79) of the Finance Act, 1994. The appellant had also relied upon on the ruling of this Tribunal in the case of Commr. of Customs & Central Excise, Hyderabad-II v. CMC Ltd. - 2007 (7)S.T.R.702 (Tri.-Bang.), wherein under similar circumstances, it was held that the issue of EPIC cannot be considered as “Photo Identity” falling within the definition of “Photography” and “Photography studio or agency” as per Sections 65(78) and 65(79) of the Finance Act, 1994 as the activity carried out by M/s. CMC Ltd. was sovereign activity of the State functionaries, which cannot be brought under tax limit.
However The Additional Commissioner refused to rely on the ruling of Tribunal on the ground that as the Revenue preferred appeal before the Hon’ble High Court, the issue had not attained finality and further, confirmed to proposed duty liability of Rs. 23, 73,000/- with interest and equal amount of penalty under Section 78 of the Finance Act, 1994. Further, penalty was imposed under Sections 76 and 77 of the Finance Act, 1994.
Being aggrieved, the appellant preferred appeal before the ld. Commissioner (Appeals), who was pleased to dismiss the appeal agreeing with the findings of the Additional Commissioner.
Being aggrieved, the appellant-assessee filed appeal before the Tribunal.
Appellant’s contention:-The ld. Counsel appearing for the appellant, contested that the impugned order was bad and cryptic and had ignored ruling of Tribunal, which were binding by the ld. Commissioner (Appeals). He further pointed out that the said ruling in the case of M/s. CMC Ltd. (supra), were relied on by the another Division Bench of Tribunal in the case of UTI Technology Services Ltd. v. Commr. of Service Tax, Mumbai - 2012 (26)S.T.R.147 (Tri.-Mumbai), wherein considering the issue of PAN Cards on behalf of Income Tax Department, it was held that the PAN Cards were issued in relation to sovereign function of Income Tax Department, of levy and collection of income tax. It was not in relation to any business, and hence, not leviable to service tax. He also pointed out that Division Bench also made reference to C.B.E. & C. Circular No. 89/7/2006-S.T., dated 18-12-2006, wherein Board had opined that a number of sovereign public authorities, perform certain functions/duties, which were statutory in nature. These functions were performed in terms of specific responsibility assigned to them under the law in force. The tax collected by them for performing such activities was in the nature of compulsory levy as per the provisions of the relevant statute and it was deposited into the Government Treasury. Such activity was purely in public interest and it was undertaken as mandatory and statutory function. These were not in the nature of service to any particular individual for any consideration. Therefore, such activity performed by an authority under the provisions of law, did not constitute provision of taxable service to a person and therefore, no service tax was leviable on such activities. In the similar facts and circumstances, the Division Bench of this Tribunal in the case of Commr. of Central Excise, Indore v. Ankit Consultancy Ltd. - 2007 (6)S.T.R.101 (Tri.-Del.),relying on the ruling of the Hon’ble Supreme Court in the case of Bhaktawar Singh Balkishan v. Union of India - 1988 (2) SCC 293, also held that preparation of voter list for Chief Electoral Officer, was a part of sovereign activity of State and not a business activity with an eye on profit and the same was not assessable to service tax. It was further urged that the works done of EPIC, was in the nature of Works Contract. It was further urged that the impugned order was contrary to the Circular of C.B.E. & C. and fit to be set aside. He further urged that the entire demand was time-barred as extended period of limitation was not invocable, therefore, there was no contumacious conduct or suppression of facts.
 
Reasoning of judgment:- After considering the rival contentions, it was held that the work done by the appellant in respect of preparation of EPIC under agreement with the Governor or the State functionaries, was a sovereign activity of the State/Union and accordingly, the said activity was held not taxable. Similar views had been expressed by the C.B.E. & C. in their Circular dated 18-12-2006 (supra). Thus, impugned order was set aside and appeal was allowed with consequential relief in accordance with law.
 
Decision:- Appeal allowed
 
Comment: -the gist of this case is that the preparation of Elector’s photo Identity card was a sovereign activity of the State/Union and was under agreement with the Governor or the State Functionaries therefore it should not be brought under the ambit of Service Tax.
 
Prepared by:- Monika Tak 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com