2011 (6) TMI 378 - AT - Service Tax

Waiver of pre-deposit - Commercial training or Coaching service - Held that - There is no denial that the appellant had discharged the Service Tax liability under commercial training or coaching services as per the returns filed by him - The adjudicating authority wants to include the value of the books and notes and subscription to journals etc. to the aggregate value of taxable service - Prima facie sale of books journals and other materials by the assessee to the general public and students of their classes cannot form the value of the taxable service for the purpose of taxing under the Commercial training or Coaching service - applications for the waiver of pre-deposit of the amounts involved are allowed and recovery thereof stayed - Decided in favour of assessee.

Summary

Issues:
1. Waiver of pre-deposit of Service Tax, Education Cess, and penalties for the periods April 2003 to March 2009.
2. Applicability of Notification No.12/2003 and relevance of Board's Circular dated 20th June, 2003.
3. Consideration of the value of books, notes, and subscription to journals in the taxable service under 'commercial training or coaching services.'
4. Prima facie case for the waiver of pre-deposit.

Analysis:

Issue 1: Waiver of pre-deposit of Service Tax, Education Cess, and penalties for the periods April 2003 to March 2009.
The stay petitions were filed seeking the waiver of pre-deposit of substantial amounts related to Service Tax, Education Cess, interest, and penalties imposed for the period between April 2003 to March 2009. The adjudicating authority confirmed these amounts, alleging non-payment of Service Tax during the said period.

Issue 2: Applicability of Notification No.12/2003 and relevance of Board's Circular dated 20th June, 2003.
The appellant argued that the demand for Service Tax arose from the sale of products like books, notes, etc., to students not enrolled in their classes. They contended that the benefit of Notification No.12/2003 should apply, and the reliance on the Board's Circular dated 20th June, 2003, by the adjudicating authority was irrelevant.

Issue 3: Consideration of the value of books, notes, and subscription to journals in the taxable service under 'commercial training or coaching services.'
The appellant claimed that the sale of books, journals, and other materials to the general public and students should not be included in the value of taxable service for taxing under the category of commercial training or coaching services. The Tribunal found merit in this argument, noting that the business of selling books was independent and not an integral part of the coaching classes.

Issue 4: Prima facie case for the waiver of pre-deposit.
After considering the submissions and records, the Tribunal observed that the appellant had discharged the Service Tax liability for commercial training or coaching services as per the returns filed. It was noted that the adjudicating authority failed to consider the appellant's claim that the sale of books was a separate business. Consequently, the Tribunal found a prima facie case for waiving the pre-deposit amounts, granting a stay on recovery until the appeal's disposal.

This judgment highlights the importance of analyzing the nature of services provided and the relevance of ancillary activities in determining the taxable value under specific service categories. The Tribunal's decision to grant a waiver of pre-deposit underscores the need for a thorough examination of all relevant factors before imposing tax liabilities and penalties.