2014 (12) TMI 960 - AT - Service Tax

Waiver of pre-deposit of service tax - Commercial, training and coaching services - Held that - Prima facie, we find that the applicant has made out a strong case in respect of demand of ₹ 3 lakhs which is in respect of applicant providing computer education to the students in government schools as per the syllabus. Keeping in view the facts and circumstances, applicants are directed to deposit ₹ 1,25,000 within a period of 8 weeks in addition to the amount already deposited and report compliance. The pre-deposit of the remaining dues are waived and recovery stayed during the pendency of the appeal. - Partial Stay granted.

Summary

Issues:
1. Waiver of pre-deposit of service tax demand of Rs. 5,54,249.
2. Nature of services provided by the applicant - commercial, training, and coaching services.

Analysis:

Issue 1: Waiver of pre-deposit of service tax demand of Rs. 5,54,249
The applicants sought a waiver of pre-deposit of service tax amounting to Rs. 5,54,249. The demand included approximately Rs. 2 lakhs for providing training under KEONICS YOUVA.COM and around Rs. 3 lakhs for activities in government schools involving computer education for students. The contention was that providing computer education in government schools as per the prescribed syllabus did not constitute commercial training or coaching services. The Tribunal found merit in the applicant's argument regarding the demand of Rs. 3 lakhs for providing computer education in government schools. Consequently, the Tribunal directed the applicant to deposit Rs. 1,25,000 within 8 weeks, in addition to the amount already deposited, while waiving the pre-deposit of the remaining dues and staying the recovery during the appeal process.

Issue 2: Nature of services provided by the applicant - commercial, training, and coaching services
The demand for service tax was confirmed on the grounds that the applicants were providing 'commercial, training, and coaching services'. However, the applicants contended that their provision of computer education in government schools aligned with the syllabus provided by the Government of Karnataka, Department of Public Instructions, and did not constitute commercial training or coaching. The Tribunal, prima facie, found merit in the applicant's argument regarding the nature of services provided for computer education in government schools. The Tribunal's decision to waive the pre-deposit of the remaining dues and stay the recovery during the appeal process indicated a favorable view towards the applicant's position on the nature of services provided.

In conclusion, the Tribunal granted partial relief to the applicants by waiving the pre-deposit of a portion of the service tax demand and staying the recovery during the pendency of the appeal. The judgment highlighted the importance of aligning the nature of services provided with the legal framework to determine the applicability of service tax, emphasizing compliance with prescribed guidelines in service provision.