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2018 (12) TMI 946 - AT - Service TaxCommercial Coaching or Training Service on computer training Service - period of dispute is from 01.07.2004 to 15.06.2005 - demand of service tax - Held that - Issue decided in the case of M/S GARGI CONSULTANTS PVT. LTD. VERSUS CCE, ALLAHABAD 2013 (5) TMI 695 - CESTAT NEW DELHI , where it was held that a computer training institute is covered by the expression vocational training institute and as such, was exempted from service tax - demand of ₹ 7,13,334/- with interest for the period from 10.09.2004 to 15.06.2005 is set aside on the ground of limitation - However, the demand for the previous period namely from 01.07.2004 to 09.09.2004 amounting to ₹ 1,02,200/- with interest thereon which has already been conceded by the Ld. Advocate, is upheld. Valuation - inclusion of value of course materials for the purpose of arriving at value of taxable service - Held that - Reliance placed in the case of CHATE COACHING CLASSES PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, AURANGABAD 2012 (6) TMI 721 - CESTAT, MUMBA , where it was held that since the expression is not used in the notification and the fact that the books sold are of another entity, we do not find any reason to deny the benefits of the Notification No.12/2003-ST - the demand of ₹ 45,919/- for supply of study materials for the period 2004-05 and 2005-06 cannot sustain. Franchisee Service - Renting of Immovable Property Service - Demand of service tax - Held that - the demands of service tax under Franchisee Service amounting to ₹ 1,23,927/- and Renting of Immovable Property Service amounting to ₹ 1,57,598/- with interest have already been conceded by the Ld. Advocate and are therefore upheld. The appellants will be required to pay up these liabilities also with interest thereon. As the demand of ₹ 7,13,334/- for the period 10.09.2004 to 15.06.2005 under Commercial Coaching or Training Service and ₹ 45,919/- in respect of tax liability on value of course materials have been set aside, the penalties under Section 78 ibid is also modified - The total penalty imposed under Section 78 ibid., is therefore required to be reduced/modified to ₹ 3,83,725/-. Appeal allowed in part.
Issues Involved:
1. Tax liability on computer training services provided by appellants. 2. Taxability of course materials supplied to students. 3. Service tax liability on services provided to franchisees. 4. Service tax liability on renting out immovable property. Analysis: Issue 1: Tax liability on computer training services The appellants were engaged in providing computer training services and were registered under Commercial Coaching or Training Service. The Department alleged that the appellants had not discharged their tax liability correctly. The dispute arose regarding the exemption of services provided by computer training institutes from service tax. The Tribunal considered various judgments, including the decision of the Hon'ble Supreme Court in a specific case, and concluded that the demand for the period from 10.09.2004 to 15.06.2005 was time-barred. However, the demand for the previous period from 01.07.2004 to 09.09.2004 was upheld. The Tribunal set aside the demand of Rs. 7,13,334/- for the later period but upheld the demand of Rs. 1,02,200/- for the former period. Issue 2: Taxability of course materials The Department demanded tax on the value of course materials supplied to students, arguing that they should be included in the taxable value for service tax purposes. The Tribunal, after considering relevant Tribunal decisions, ruled in favor of the appellants. It held that the demand of Rs. 45,919/- for the supply of study materials for specific periods was not sustainable and set it aside. Issue 3: Service tax liability on services provided to franchisees The appellants had provided services to franchisees and received various fees. The demand of Rs. 1,23,927/- with interest in this regard was conceded by the appellants and upheld by the Tribunal. Issue 4: Service tax liability on renting out immovable property The appellants had rented out their property but had not discharged the service tax liability. The demand of Rs. 1,57,598/- was also conceded by the appellants and upheld by the Tribunal. The Tribunal modified the penalties imposed under Section 78 of the Finance Act, 1994, based on the revised tax liabilities upheld in the order. The total penalty was reduced to Rs. 3,83,725/-. The appellants were directed to pay the upheld tax liabilities along with interest. The appeal was partly allowed based on the Tribunal's findings and decisions on each issue.
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