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Judgment
The appellant provide the taxable service of photography. The period of dispute in this case is from April 2007 to November 2007. During this
period, the appellant instead of paying service tax in respect of photography service provided by them on the gross amount charged, were paying
service tax only on the net amount after deducting the cost of photography paper, chemicals and consumables. The department being of the view the
service tax was payable on the gross amount charged, initiated proceedings for recovery of the differential amount of service tax alongwith interest
and also for imposition of penalty which resulted in order-in-original dated 29/04/08 being passed by the Assistant Commissioner by which the service
tax demand of Rs.56,514/- was confirmed against the appellant alongwith interest and beside this, penalty was imposed under Section 76 as well as
On appeal being filed to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 10/09/08 upheld the Assistant
Commissioner’s order. Against this order of the Commissioner (Appeals), this appeal has been filed. However, the disputed amount of service tax
has been paid.
Heard both the sides.
Both the sides agree that the issue involved in this case - whether the service tax is chargeable on the gross amount charged or the net amount
after excluding the value of paper, chemicals and other consumables, the same stands decided in favour of the department by Larger Bench judgment
of the Tribunal in the case of Agrawal Colour Advance Photo System vs. CCE, Bhopal reported in 2010 (19) S.T.R. 181 (Tri. - Del.). The appellant,
however, plead that since during the period of dispute, there were conflicting judgments of the Tribunal on this issue penalty under Section 76 and 77 is
not warranted. We are inclined to accept this plea of the appellant as only because of divergent views expressed in various judgments of the Tribunal
on this issue, this matter had been referred to Larger Bench in the case of Agrawal Colour Advance Photo System vs. CCE, Bhopal (supra), which
finally decided this issue in favour of the department. In view of this, we are of the view that Section 80 of the Finance Act, 1994 is invokable and
accordingly the penalty imposed on the appellant under Section 76 and 77 is waived. The appeal stands disposed of, as above.
(Operative part of the order pronounced in the open court.)