2022 (9) TMI 677 - AT - Service Tax

Levy of service tax - Mailing list compilation and Mailing services - fee towards providing access to CAT s scores - HELD THAT - The appellants are a premier institution and are engaged in providing education in the field of management and business. For the purpose of admission into the IIMs, IIM Ahmedabad conducted the CAT (common admission test) of candidates in the year 2009. A large number of candidates took the exam and some candidates were selected by IIMs for the purpose of admission to IIM. A larger number of candidates who took the CAT exam also applied to various other institutes and those institutes sought to use the CAT s scores for the purpose of admission into their schools. To access the CAT scores for themselves, the said Non-IIM Institutes entered into a Memorandum of Understanding with IIM Ahmedabad, the appellant. The Memorandum of Understanding clearly prescribed the eligibility of people who could take the CAT exam. It is seen that the appellants are not compiling any list or providing list of names addresses etc. The appellants are merely providing scores in respect of names of candidates supplied by the clients (Non-IIM Institutes). Moreover, the activity of Mailing list compilation and mailing is done for or on behalf of the client. In this case the appellants are only dealing with the clients and not with any third party. There are no reason to hold that the activity done by the appellant is covered under the head of Mailing list compilation and Mailing service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of service tax under "Mailing list compilation and Mailing services."

Analysis:
1. The appellant, an Indian Institute of Management (IIM), conducted the Common Admission Test (CAT) for admission to IIM. Non-IIM institutes used CAT scores for evaluating applicants, paying prescribed fees per candidate and an annual fee. Central Excise Revenue Audit observed this as "Mailing list compilation and Mailing service," issuing a show cause notice for service tax.

2. The Memorandum of Understanding between IIM and non-IIM institutes outlined the process of providing CAT scores for admission purposes. The appellant argued that the service provided did not fall under the definition of "mailing list compilation and mailing service" as per the Finance Act and CBEC Circular.

3. The Tribunal noted that the appellant's activity did not involve compiling lists or providing addresses, unlike the defined service. The appellant only provided scores of candidates supplied by clients. The service was not done for third parties but directly for clients, distinguishing it from the taxable service definition.

4. Referring to the CBEC Circular, the Tribunal highlighted that the defined service typically involved compiling lists from various sources and mailing on behalf of clients, which differed from the appellant's activity. The Tribunal concluded that the appellant's service did not fall under "Mailing list compilation and Mailing service," allowing the appeal.

5. The Tribunal's decision, delivered on 14.09.2022, emphasized that the appellant's activity of providing CAT scores to non-IIM institutes for admission purposes did not meet the criteria of "Mailing list compilation and Mailing service," thereby ruling in favor of the appellant.