Page 65 - GSTL_16th July 2020_Vol. 38_Part 3

2020 ] AGRAWAL COLOUR ADVANCE PHOTO SYSTEM v. COMMISSIONER OF C. EX. 303
263/2008, decided on 23-4-2009) has been rendered remanding the matter
purely on the basis of an incorrect clarification issued by an officer of the
Board, subsequently withdrawn. The decision of the Hon’ble Supreme
Court in the case of CC&CE v. Technica Colour Lab (Civil Appeal No. 7060 of
2009), dated 21-7-2009 merely follows that of Surabhi Colour Lab (supra).
Under the circumstances, we are bound to follow the ratio of Hon’ble Su-
preme Court’s judgment in the case of C.K. Jidheesh (supra). As pointed out
by the Ld. D.R., several Hon’ble High Courts have held that there is no sale
or deemed sale of goods and material such as paper, chemical etc., in pho-
tographic service and hence disapproved levy of sales tax on part of the
gross value of photographic service (vide Amar Kumar Birley v. State of Bihar
(CWJ Case No. 3932 of 1992) - Patna High Court, Studio Sujata v. CST - Oris-
sa High Court, V.V. Jha v. State of Megahalaya - Gauhati High Court etc.). In
Rainbow Colour Lab v. State of M.P. (2000) 2 SCC 385, the Hon’ble Supreme
Court has also taken the same view. As rightly pointed out by the Ld. DR,
the obiter contained in Bharat Sanchar Nigam Ltd. (supra) does not overrule
either C.K. Jidheesh (supra) or Rainbow Colour Lab (supra).”
Ultimately, in respect of the questions referred to it, the Larger Bench held,
thus :-
“22. Hence, our answers to the two questions referred to in paragraph 3
above are as follows :-
(i) For the purpose of Section 67 of the Finance Act, 1994, the val-
ue of service in relation to photography would be the gross
amount charged including cost of goods and material used
and consumed in the course of rendering such service. The
cost of unexposed film etc., would stand excluded in terms of
Explanation to Section 67 if sold to the client.
(ii) The value of other goods and material, if sold separately
would be excluded under exemption Notification No. 12/2003
and the term ‘sold’ appearing thereunder has to be interpreted
using the definition of ‘sale’ in the Central Excise Act, 1944
and not as per the meaning of deemed sale under Article
366(29A)(b) of the Constitution.”
23. On the aforesaid analysis of the legal position it can be said that de-
termination of value of taxable service of photography depends on the facts
and circumstances of each case as the Finance Act, 1994 does not intend
taxation of goods and materials sold in the course of providing all the taxa-
ble services.”
In view whereof, the appeal of the appellant was also dismissed vide impugned
order dated 7-6-2012 (Annexure A-6), however, the penalty was set aside. In this
manner, the present appeals have been preferred by the appellants.
5. Learned Counsel for the appellants submitted that the value of pho-
tography paper and processing chemicals etc. are not a part of the value of the
taxable services. According to him, the appellant is not liable to pay the service
tax on the gross amount charged from its customers in lieu of photography ser-
vice, which includes processing and developing of photographic films and print-
ing of photographs etc. Learned Counsel invited our attention to Article 366(29A)
of the Constitution of India as amended vide 46th Amendment Act, 1982 where-
by definition of “tax on the sale or purchase of goods” in Clause (29A) had been
inserted. It was urged that sub-clause (b) thereof provides for levy of tax on the
transfer of property in goods whether as goods or in some other form involved in
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