2015 (7) TMI 271 - AT - Service Tax

Valuation - Service tax on the amount of scholarship / fee discounts / fee concessions given to certain students - Deduction from assessable value - Held that - Prima facie find that the appellant has paid service tax on the entire amount received for providing commercial training or coaching service. The so-called scholarship was nothing but a fee discount granted to certain students. In other words, it collected discounted fee from certain students and so in relation to those students the gross amount charged for providing commercial training or coaching service was the discounted fee. Thus, what is called scholarship in the present case is not any amount that was paid to the students from whom fee at full rate was collected; it was just a fee discount. It well settled that for legal analysis what is relevant is the actual nature of the transaction and not the name given to it ( i.e. transaction). - appellant has been able to make out a strong prima facie case in its favour. Therefore we grant full waiver of pre-deposit and stay recovery of the impugned liability during pendency of the appeal. - Stay granted.

Summary

Issues:
Service tax demand on scholarship/fee discounts/fee concessions given to students.
Applicability of service tax on the amount of scholarship/fee discounts/fee concessions.
Validity of demand for service tax on scholarship amounts.
Applicability of extended period for raising demand.

Analysis:

1. The appeal was filed against an order confirming a service tax demand on scholarship/fee discounts/fee concessions given to students for the period 1.4.2007 to 31.3.2012. The contention was that the appellant had not paid service tax on these amounts, which were considered as scholarship and not deductible from the assessable value.

2. The appellant argued that it had paid service tax on the entire gross amount received for providing commercial training or coaching service. The amounts termed as scholarship were actually fee concessions or discounts given to students. It was emphasized that there was no wilful mis-statement or suppression of facts, thus the extended period for raising the demand should not be applicable.

3. The respondent contended that scholarship amounts given to students should not be deducted from the full fee charged. The argument was that scholarship is an amount given to students and should not be considered as part of the fee charged from the students.

4. The Tribunal analyzed the contentions of both parties and found that the appellant had indeed paid service tax on the entire amount received for the services provided. The scholarship amounts were deemed as fee discounts granted to certain students, not as separate payments to students. The Tribunal emphasized that the actual nature of the transaction, not the name given to it, is crucial for legal analysis. Therefore, the Tribunal concluded that the appellant had a strong prima facie case in its favor. As a result, full waiver of pre-deposit was granted, and recovery of the demanded amount was stayed during the pendency of the appeal.