2009 (7) TMI 39 - AT - Service Tax

Commercial Coaching and Training Service - Service Tax on Unrealized fee Exemption to small service providers upto 4 lakhs whether amount of fee refunded would be deducted from the gross amount for the purpose of calculation of turnover under notification 6/2005 ST dated 1/3/200 8 Held yes matter remanded for verification of facts as claimed by the assessee.

Summary

Issues:
1. Applicability of Notification No.6/05-ST for exemption of service tax.
2. Realization and refund of fees and service tax by the appellant.

Analysis:
1. The appellant contended that there was no realization of fees amounting to Rs.89,485 in relation to coaching services provided. The appellant also argued that the service tax related to unrealized fees and refunded fees was not required to be deposited. The appellant pointed out that as per their accounting method, the service tax collected on refund amounts was Rs.16,218. The appellant claimed eligibility for the benefit of Notification No.6/05-ST for small taxpayers. However, the authorities did not consider these submissions, leading to the dispute presented before the Tribunal.

2. The appellant's representative emphasized that after deducting the Rs.89,485 from the total course fees, the net receipt amounted to Rs.3,63,179, which fell below the threshold for taxable services as per the notification. The appellant asserted that they were entitled to the exemption but were deemed ineligible by the lower authorities without proper examination of the facts presented. The appellant also highlighted the absence of realization of certain fees and the refund of service tax in specific cases, which needed to be verified by the authorities.

3. The Departmental Representative argued that the appellant failed to provide the necessary materials for the authorities to consider the appellant's contentions, resulting in unfavorable decisions by both lower authorities. However, the Tribunal acknowledged the appellant's entitlement to the exemption under the notification if the conditions were met. The Tribunal directed the adjudicating authority to verify the realization of fees and the refund of service tax by the appellant. Once these aspects were confirmed, the appellant would be eligible for the benefit as a small taxpayer, thereby negating the need for tax imposition.

4. The Tribunal remanded the matter to the adjudicating authority for verification of the factual aspects regarding fee realization and service tax refunds, with a deadline for the decision. The appellant was ensured a fair opportunity for a hearing in the process. Consequently, the impugned order was set aside, and the case was returned to the adjudicating authority for further examination and a new decision.