Page 67 - GSTL_16th July 2020_Vol. 38_Part 3

2020 ] AGRAWAL COLOUR ADVANCE PHOTO SYSTEM v. COMMISSIONER OF C. EX. 305
embedded in the photograph is merely incidental. Thus, rightly the benefit of the
Notification No. 12/2003-S.T. has not been extended to the appellant. In this re-
gard, Learned Counsel also invited our attention to a clarificatory Circular M.F.
(D.R.) F. No. 233/2/2003-CX, dated 3-3-2006 whereby the Notification No.
12/2003-S.T., dated 20-6-2003 has been clarified in respect of service tax on pho-
tography services to mean that where the goods consumed during the provision
of service are not available for sale by the service provider, the exemption in
terms of Notification No. 12/2003-S.T., dated 20-6-2003 will not be available.
8. Controverting the said stand of the Learned Counsel for the re-
spondents, Learned Counsel for the appellants argued that even if the gross
amount charged by the respondents is treated as value of taxable service, still the
case of the appellants is covered by Notification No. 12/2003-S.T. so far as the
value of the material sold to the customers is concerned. The appellants have al-
ready submitted documentary proof in the form of invoices and further no Cen-
vat credit has been taken on the duty paid on the said goods.
9. Having heard Learned Counsel for the parties, we are of the consid-
ered view that the present appeals deserve to be allowed.
10. In view of the aforesaid factual background, a moot question before
the Learned Authorities below was: as to whether the appellant-assessee was
entitled to the benefit of Notification No. 12/2003-S.T., dated 20-6-2003. In order
to appreciate the said controversy, it would be expedient to reproduce the rele-
vant portion of the circular, which reads as under :-
“Notification No. 12/2003-S.T., dated 20-6-2003. - In exercise of the powers
conferred by Section 93 of the Finance Act, 1994 (32 of 1994), the Central
Government, being satisfied that it is necessary in the public interest so to
do, hereby exempts so much of the value of all the taxable services, as is
equal to the value of goods and materials sold by the service provider to the
recipient of service, from the service tax leviable thereon under Section 66
of the said Act, subject to condition that there is documentary proof specifi-
cally indicating the value of the said goods and materials.
Provided that the said exemption shall apply only in such cases where -
(a) no credit of duty paid on such goods and materials sold, has
been taken under the provisions of the Cenvat Credit Rules,
2004; or
(b) where such credit has been taken by the service provider on
such goods and materials, such service provider has paid the
amount equal to such credit availed before the sale of such
goods and materials.”
Perhaps there had been some representation from Punjab Color Lab Association,
Jalandhar and thereafter, clarification was sought by certain photographic asso-
ciations whether the value of materials consumed during the provision of service
by the service provider for rendering the service is also excludable from the val-
ue of taxable service. Thereupon, a Clarificatory Circular M.F. (D.R.) F. No.
233/2/2003-CX, dated 3-3-2006 was issued, which reads, thus :-
“3. The matter has been examined by the Board. The intention of the Noti-
fication No. 12/2003-S.T., dated 20-6-2003 is to provide exemption only to
the value of goods and material sold subject to documentary evidence of
such sale being available. Therefore, in case, the goods are consumed dur-
ing the provision of service and are not available for sale, the provision of
the said notification would not be applicable. Therefore, in supersession of
GST LAW TIMES  16th July 2020  67