2024 (10) TMI 1068 - AT - Service Tax

Classification of service - Mailing List Compilation and Mailing Service or not - sharing of the CAT score by the appellant-IIM, Kozhikode with the non-IIM institutions for admission of candidates in their institutions - HELD THAT - 'Mailing List Compilation is the process of compiling business and consumer mailing lists into a database. The appellant does not compile any information for the non-IIM institutions, the appellant only shares the CAT score obtained by the candidate in the examination conducted by them and only shares this information available with them and they do not compile any information from any other source. Further, it is found that they do not provide any services of sending documents, materials, information or any other goods by addressing, stuffing, sealing, metering or mailing the envelope or packet for or on behalf of the non-IIM institutions, therefore they are not a mailing company des-patching the goods to the customers. The activity of sharing of CAT score by the appellant with the non-IIM institution does not fall under the service category of Mailing List Compilation and Mailing Service , hence, the demand of service tax along with interest and imposition of penalties on the appellant are not sustainable and deserves to be set aside. Appeal allowed.

Summary

Issues:
Classification of service for sharing CAT scores under 'Mailing List Compilation and Mailing Service'; Applicability of service tax on sharing CAT scores; Imposition of penalties and interest.

Analysis:
The case involved the classification of the service provided by an autonomous institution, engaged in imparting Management Education, for sharing CAT scores with non-IIM institutions. The issue was whether this activity falls under the taxable service category of 'Mailing List Compilation and Mailing Service' as per Section 65(105)(zzzg) of the Finance Act, 1994. The appellant contended that they only shared CAT scores without compiling or providing any additional information like names and addresses, which are essential for 'mailing list compilation service'. They argued that the information shared did not meet the criteria specified in the legislation and the CBEC Circular. The appellant also highlighted that they did not engage in the business of compiling data for commercial purposes, as required by the taxable entry.

The Commissioner had upheld the demand for service tax, interest, and penalties, stating that the appellant's database contained complete candidate information, including names and addresses, shared along with CAT scores. However, the appellant argued that the sharing of CAT scores was primarily for admission purposes and not for compiling data for commercial use. They referenced a CBEC Circular clarifying the scope of 'mailing list compilation and mailing service', which excluded sharing CAT scores with non-IIM institutions from its ambit. The appellant also cited a previous Tribunal judgment to support their position.

After hearing both sides and examining the records, the Tribunal found that the appellant's activity of sharing CAT scores did not constitute 'Mailing List Compilation and Mailing Service'. The Tribunal noted that the appellant did not compile data for non-IIM institutions or provide mailing services, as required by the taxable entry. Therefore, the demand for service tax, interest, and penalties was deemed unsustainable. The appeal was allowed, and the decision was pronounced in favor of the appellant on 04.10.2024.