2009 (1) TMI 84 - AT - Service Tax

Activity of commercial coaching and training by firm - discount given to some students not reflected in private records - original authority shall examine the details relating to these students and revise the demand, if the discounts have not been taken into account while raising the demand - As regards, the claim that the partners giving private tuitions, and amount from sale of application and prospectus, no evidence has been produced by revenue demand upheld except to extent indicated above

Summary

Issues:
1. Validity of service tax demand on various grounds.
2. Admissibility of discounts and inclusion in taxable amount.
3. Claim of partners giving independent tuitions.
4. Sale of application forms and prospectus for service tax.
5. Invocation of section 80 provisions.
6. Reliability of student-wise register for service tax demand.
7. Imposition of penalties under sections 76 and 78.

Analysis:
1. The appeal challenged the service tax demand confirmed by the Commissioner (Appeals) on multiple grounds, including discounts not reflected in student-wise registers, income from partners' independent tuitions, and sale of application forms and prospectus.
2. The appellant argued that the student-wise register was maintained for memory purposes and discounts were strategic, based on social status and relationships. However, the tribunal found the register reliable for service tax calculation, except for cases where discounts were already accounted for.
3. Regarding partners giving private tuitions, the tribunal dismissed the claim as unsubstantiated, noting the lack of evidence or advertisements supporting the assertion. The inclusion of tuition income in the institute's records indicated a lack of independence.
4. The tribunal rejected the argument on sale of application forms and prospectus, citing a lack of evidence to support the claim that these activities were unrelated to commercial coaching services.
5. The appellant's plea for invoking section 80 provisions was not accepted by the tribunal.
6. The tribunal upheld most of the service tax demand, except where discounts were already considered, and reduced the penalty under section 76 to Rs.25,000, while maintaining the penalty under section 78.
7. Ultimately, the tribunal disposed of the appeal, affirming the service tax demand with interest, reducing one penalty, and upholding another penalty based on the facts and circumstances presented during the proceedings.