Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of Cus. And C. Ex. vs Cmc Limited on 23 July, 2007
Equivalent citations: (2008)12VST335(CESTAT-BLORE)
ORDER S.L. Peeran, Member (J)
1. All these appeals raise a common question of law and facts and hence, they are taken up together for disposal as per law.
2. The Revenue appeals are against the Commissioner (Appeals)'s orders (i) No. 10/2006(H-II) S. Tax dated 30-8-2006 and (ii) 17/2006 (H-II) S. Tax dated 15-9-2006 by which he has held that the issue of Electors Photo Identity Card (EPICs) is an activity which cannot be brought within the ambit of photography service in terms of Sections 65(78) and Section 65(79). The findings recorded by the Commissioner (Appeals) in the Revenue appeals in Paragraphs 5 to 7 are reproduced herein below:
5. I have carefully gone through the case records and the submissions made by the appellants. As per Clause 78 of Section 65 of the Finance Act, 1994, photography service means "Photography includes still photography, motion picture photography, laser photography, aerial photography or fluorescent photography." Photography Studio or Agency means "Any professional photographer or a commercial concern engaged in the business of rendering service relating to photography." Value of taxable service means "Gross amount charged from the customer, but excluding the cost of unexposed photographic film, unrecorded magnetic tape or such other storage devices, if any, sold to the client during the course of providing the service."
6. By seeing the above definitions, it is very clear that the photographer has to follow the order given by the customer and to handover the photos to the same customer by charging some price. Here, it is the final activity to hand over the photo(s) to the customer as per the requirement. But in the present case, capturing the photos of the electors/voters is not the final activity, but it is one among the others as detailed in the appellants' grounds (cited in the above Para No. 3(1)). Hence, the photography services defined in the Clause 78 of Section 65 of the Finance Act, 1994 is not applicable to the present case. The case law quoted by the appellants i.e. Daelim Industrial Co. Ltd. 2003 (155) E.L.T. 457 (Tri.-Del.) is rightly applicable to them because the part of the work cannot be subjected to tax, even though capturing of photographs is subjected to Service tax under photography services.
7. As the services rendered by the appellants are not subjected to the Service tax, issuing of Show Cause Notice is not tenable. Hence, I pass the following order.
ORDER The appeal is allowed with consequential relief to the appellants.
3. In respect of M/s. Bajarang Infotech Systems Pvt. Ltd., the Commissioner has upheld the Revenue's plea that the activity has to be brought within the category of photographic service and demands have been confirmed. The same is under challenge.
4. We have heard both the learned JDRs and the Counsels representing the appellants.
5. The learned Counsel, Shri K.S. Ravi Shankar, referred to Circular Nos. 141/52/95-CX, dated 14-8-1995 and 195/20/CX., dated 3-4-1996 wherein a clarification has been given by the Board with regard to the Photo Identity Cards. In terms of the said Notification, the department has viewed that the Photo Identity Cards are required to be treated as goods and to be classified under subheading 4109.90 of the Schedule to the CET, 1985. It is his submission that once the department has taken this view, then the question of attracting Service tax does not arise. It is his further submission that the issue of Photo Identity Cards by the Election Commissioner is a sovereign duty under the Constitution of India and such activity performed by an officer of the Election Commission is required to be treated as an activity of the State and, therefore, it cannot be levied to tax. He finds strength in the ruling of the Tribunal in the case of CCE, Indore v. Ankit Consultancy Ltd. 2007 (6) S.T.R. 101 (Tri.-Del.) wherein this issue has been decided in assessee's favour.
6. The learned Counsel, Shri K. Parameswaran, relies on the Circular No. 89/7/2006-S.T., dated 8-12-2006 which clarifies with regard to certain functions and duties performed by statutory authorities that such activities performed by statutory authorities are to be treated as performed by a sovereign/public authority under the provisions of law and they cannot be considered for the purpose of service tax. The learned Counsel further submits that the clarification given by the Circular No. B.11/1/2001-TRU, dated 9-7-2001 also supports their plea.
7. The learned Counsel, Ms. Anjali Agarwal, also supported the argument raised by both the Counsels and prays for setting aside the order in the case of M/s. Bajarang Infotech Systems Pvt. Ltd. She submits that in their case, Service tax has also been levied in respect of passes issued by the Transport authorities. This also falls under the same category as Photo Identity Cards issued by the Election Commission.
8. We have carefully considered the submissions and we note from the Stay Order given in these matters that the activity carried out by the parties are sovereign activity performed by the State functionaries. The Office of the Chief Election Commission is constituted under the Constitution of India. They are not carrying out the activity of photographic service by issuing Electors Photo Identity Cards. Tine issue of Electors Photo Identity Cards cannot be considered as "Photo Identity" falling within the definition of "Photographic Service" as per Section 65(78) as well as Section 65(79). The Circular referred to by the Counsels clearly apply to the facts of the case. Furthermore, the Tribunal, in the case of CCE v. Ankit Consultancy Ltd. (cited supra), has clearly held that any activity performed by a State organ to discharge the sovereign activity of the State cannot be brought under the tax limit. This finding is also supported by the Circulars noted supra. Further, it is seen that the Board's Circular No. 141/52/95-CX and 195/20/CX views this activity to bring them under the definition of "goods" for exigibility. There is no merit in the Revenue appeals and the same are rejected and the appeal of M/s. Bajarang Infotech Systems Pvt. Ltd. is allowed with consequential relief, if any.
(Pronounced and dictated in open Court)