2017 (1) TMI 1602 - AT - Service Tax

Liability of Tax - amount collected towards supply of study material/kit, from the candidates - Commercial Training and Coaching Services - Benefit of N/N. 12/03-ST dated 20.06.2003 was not allowed on the ground that they have provided a composite service of coaching and the study materials are essential for rendering service - Held that - Appellants have separate receipt for supply of books and study materials indicating the price clearly. They have sold such study materials /books to non-registered students. Their prospectus advertising for various coaching programmes clearly mentions the price of books and study materials. The appellant s claim for exemption under N/N. 12/03-ST cannot be rejected - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Tax liability on the amount collected for supply of study material/kit in coaching services.
2. Claim for exemption under Notification No.12/03-ST.
3. Legality of denying exemption under the notification.

Analysis:
1. The appellants were engaged in providing coaching for entrance examinations and were registered for paying service tax under "Commercial Training and Coaching Services." The dispute centered around their tax liability concerning the amount collected for supplying study material/kit to candidates. The lower authorities disallowed the appellant's claim for exemption, asserting that the study materials were essential for imparting coaching services and were incidental to the primary service.

2. The appellant contended that they supplied study materials under specific bills with documentary evidence to support their exemption claim under Notification No.12/03-ST. They argued that the study materials sold were eligible for exemption as per the notification, citing relevant cases in support of their position.

3. After hearing both parties and examining the appeal records, the Tribunal found that the appellants had separate receipts for the supply of books and study materials, clearly indicating the price. The Tribunal noted that the study materials were also sold to non-registered students, and the prospectus advertised prices for books and study materials. Based on these facts, the Tribunal concluded that the appellant's claim for exemption under Notification No.12/03-ST should not be rejected. The Tribunal emphasized that the denial of the exemption was not legally sustainable and cited previous Tribunal decisions supporting their ruling.

4. Consequently, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant. The decision was based on the analysis of the factual scenario, supporting documents, and legal precedents cited during the proceedings.