2012 (6) TMI 721 - AT - Service Tax

Denial of benefit of Notification No.12/2003-ST dated 20.6.2003 - appellant is engaged in providing the service of commercial training and coaching - AO denied granting benefit of Notification as the appellant is providing study material to students and the value of the said material has not been included in the assessable value - Held that - A s decided in PINNACLE Versus COMMISSIONER OF C. EX. CHANDIGARH 2011 (8) TMI 570 (Tri) it is not in dispute that the activity of the company is to provide coaching and the Revenue has not disputed the fact that the study materials were purchased by the appellants therefore there is nothing in the Notification No.12/2003-ST which would help Revenue in their arguments. The Circular of CBEC No.59/8/2003-ST dated 20.6.2003 states that such exemption will be applicable only if material sold is standard textbooks . The question as to what is a standard textbook can lead to disputes 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 - in favour of assessee.

Summary

Issues:
1. Challenge to the order confirming a demand of service tax under the Finance Act, 1994.
2. Interpretation of Notification No.12/2003 regarding exemption from service tax for goods and materials sold by service providers.
3. Dispute over whether study material provided by the appellant is includible in the assessable value of taxable services.
4. Comparison with a previous Tribunal decision regarding the applicability of the exemption under Notification No.12/2003.

Analysis:
1. The appellant challenged the order confirming a demand of service tax amounting to Rs. 2,82,46,874 along with interest and penalties under Sections 76 and 78 of the Finance Act, 1994. The appellant, engaged in commercial training and coaching services, was investigated for not including the value of study material provided to students in the assessable value of services. The exemption under Notification No.12/2003 was contested, leading to the issuance of a show cause notice and subsequent confirmation of the demand.

2. The main contention revolved around the interpretation of Notification No.12/2003, which exempts the value of goods and materials sold by service providers from service tax, subject to specific conditions. The appellant argued that they fulfilled the conditions by separately indicating the value of material supplied in the invoice, hence claiming entitlement to the exemption. Reference was made to a Tribunal decision in a similar case where the benefit of the notification was allowed to the assessee.

3. The dispute over the inclusion of study material in the assessable value of taxable services was crucial. The appellant asserted that the study material was sold separately by a third party and not integral to the service provided, thus qualifying for the exemption under Notification No.12/2003. In contrast, the respondent contended that since the study material was provided as part of the service, its value should be included in the assessable value, disqualifying the appellant from the exemption.

4. Drawing parallels with a previous Tribunal decision in the case of Pinnacle, the Tribunal analyzed the applicability of the exemption under Notification No.12/2003. The Tribunal noted that the study material was purchased from a third party, similar to the situation in the previous case, leading to the conclusion that the appellant was entitled to the benefit of the notification. Consequently, the impugned order was set aside, and the appeal was allowed, with the cross objections disposed of accordingly.