AVM STUDIO Vs. UNION OF INDIA

JUDGEMENT

(1.) THE appellant is the writ petitioner. THE appellant filed two writ petitions in W.P.Nos.35940 and 95941 of 2007 challenging the show cause notice in reference No.209/07 dated 18.10.2007 issued by the third respondent - Additional Commissioner of Central Excise and the circular in F.No.B-II/I/2000-TRU dated 9.7.2001 issued by the second respondent - Central Board of Excise and Customs, Ministry of Finance, New Delhi.

(2.) THE show cause notice proceeded that on the basis of certain intelligence that the appellant studio is not paying service tax the studio was visited by the officer of SIV Cell of the Commissioner ate of Income Tax on 31.7.2007. THE appellant was issued with a letter dated 30.7.2007 directing them to furnish details of the charges collected from their clients and also the details of service tax paid, if any, by them.

(3.) BEFORE the learned single judge, a contention was raised on behalf of the appellant that the show cause notice was based on a clarification issued by the Central Board of Excise and customs vide Ministry's letter dated 9.7.2001 in which the facilitation activities such as providing studio was also roped in for the purpose of taxation, which is impermissible in law. It was further contended that any amount of explanation offered by the appellant would not be taken note of by the authorities, as it is a well recognized principle of law that the clarification issued by the Department would be binding on the authorities. However, the learned single Judge non-suited the appellant for the relief on the premise that the issue in controversy in the writ petition was whether the appellant's activity comes within the definition of video production agency as defined under the Finance Act. That has to be determined by a fact finding body and unless the appellant has come forward with the details to the authorities so as to enable them to render a finding of fact, the question of challenging it at the stage of show cause notice cannot be legally sustainable. The said order is put in issue in these appeal. The same argument, which has been argued before the learned single judge has been placed before this Court and the judgment of PIZZERIA FAST FOOD RESTAURANT (MADRAS) PRIVATE LIMITED VS. COMMISSIONER OF COMMERCAL TAXES, CHENNAI AND OTHERS reported in (2005) 140 STC 0097, which has been referred to before the learned single judge has also been referred before this Court.