Page 64 - GSTL_16th July 2020_Vol. 38_Part 3

302 GST LAW TIMES [ Vol. 38
customer, by a photography studio or agency in relation to photography in
any manner”. From the above definitions, it is clear that any service ren-
dered relating to photography in any manner is covered under the vast
ambit of photography services as per the Act and as a result liable to service
tax. The appellant, therefore, has to pay service tax on the activity under-
taken by him as it was under the category of photography services. The ap-
pellant has also to pay the interest chargeable on the service tax amount.
However, since the value of the taxable services was the subject matter of
dispute, I am inclined to reduce the penalty imposed under Section 76 by
the lower authority from ` 6,76,386/- to ` 1,50,000/- (Rupees One Lac &
Fifty Thousand only).”
4. The order of the Commissioner (Appeals), thereafter, was assailed by
the appellant by filing second appeal before the Tribunal on the ground that the
law laid down in C.K. Jidheesh v. Union of India (2005) 13 SCC 37 = 2006 (1) S.T.R.
3 (S.C.), was overruled by the Larger Bench of the Apex Court in Bharat Sanchar
Nigam Limited v. Union of India and Others, (2006) 3 SCC 1 = 2006 (2) S.T.R. 161
(S.C.) wherein it was held that service tax can only be levied on the service por-
tion and not on the cost of material. The Tribunal vide order dated 25-5-2010
(Annexure A-4) referred the matter to a Larger Bench by framing certain ques-
tions including the questions which are involved in this batch of appeals. The
crux of the issues was: whether for the purpose of Section 67 of the Finance Act,
the value of service provided in relation to photography would be the “gross
amount charged” including the cost of material, goods used/consumed minus
the cost of unexposed film. The Larger Bench of the Tribunal answered the ques-
tions against the appellant vide order dated 11-8-2011 (Annexure A-5) and held
that unless documentary proof indicating the value of goods and material is
submitted, the benefit of the Notification would not be available to the assessee.
The burden of proof was on the assessee to establish the value of the goods and
material. The Larger Bench while answering the questions referred to it, came to
the conclusion that the gross value of service rendered is liable to service tax, as
no amount is paid separately for photography service and the goods used and
consumed in providing such taxable service. The relevant findings read as
under :-
“21. Service tax law is not the law relating to commodity taxation. The
Notification in question issued under that law seeks to achieve that end by
exempting value of goods sold while providing taxable service. There is no
doubt that papers, consumables and chemicals are used and consumed to
bring photographs into existence. It is also quite true that no service recipi-
ent goes to a photography service provider to buy paper, chemicals and
other photography materials. What the service recipient expects from the
photography service provider is the photograph. No consideration is paid
separately for photography service and the goods used and consumed in
providing such taxable service. Value of photography service includes all
elements bringing that to the deliverable stage. Consumables and chemicals
used for providing such service disappear when the photograph emerges.
The Hon’ble Supreme Court in C.K. Jidheesh’s case (supra) has upheld levy
of service tax on gross value in respect of photographic service after noting
in paragraph 14 that in case of photographic service, it is a contract of ser-
vice pure and simple and not a composite contract of sale of goods and ser-
vice. It has also endorsed the decision of Hon’ble Kerala High Court in Ker-
ala Colour Lab’s case (supra). On the other hand, the decision of Hon’ble Su-
preme Court in the case of CCE v. Surabhi Colour Lab (Civil Appeal No.
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