2013 (12) TMI 153 - AT - Service Tax

Waiver of pre deposit - Computer Coaching and Training Services - Benefit of Notification No.10/2003-ST - Held that - exemption under Notification No.12/03-ST cannot be restricted to sale of standard textbooks while determining value of Commercial Coaching Services. We find that Revenue has not made out any case that the value of materials sold is far in excess of the cost of the materials and the appellant has shifted the value of services to the value of materials. Therefore at this stage we are of the view that the amount already deposited is sufficient for admission of appeal and there shall be stay on collection of balance dues arising from the impugned order during the pendency of the appeal - Stay granted.

Summary

Issues involved:
1. Tax liability on various counts for providing 'Computer Coaching and Training Services' from 2003-04 to 2007-08.
2. Disputed tax elements involving major amounts: (i) Administrative and Promotional materials sold to franchisees, (ii) Materials sold by CSC Publications and Ramaiah Publications to franchisees, (iii) Course materials sold to students, (iv) Computer training in schools.
3. Exemption claims under Notification 12/2003-ST and Notification 10/2003-ST.
4. Request for waiver of pre-deposit of dues arising from the order.

Analysis:
1. The applicant provided 'Computer Coaching and Training Services' directly and through franchisees, leading to a tax dispute. A Show Cause Notice resulted in a confirmed demand of Rs.2,95,98,394/-. The applicant appealed, seeking waiver of pre-deposit.
2. The major disputed tax elements included the value of materials sold to franchisees, course materials sold to students, and computer training in schools. The applicant argued for exemption under Notification 12/2003-ST and Notification 10/2003-ST for certain items.
3. The applicant relied on Tribunal decisions to support exemption claims, emphasizing that the value of materials sold should not be included in the value of services provided.
4. The Revenue contended that the materials sold were essential for providing services, alleging tax evasion through innovative billing methods. They argued against exemption claims and sought pre-deposit of dues.
5. The Tribunal found that the deposited amount was sufficient for appeal admission, granting a stay on the collection of balance dues during the appeal. The Tribunal also noted that the exemption under Notification 12/03-ST should not be restricted to standard textbooks, and the Revenue failed to prove excessive value shifting from services to materials.

This detailed analysis covers the tax liability issues, exemption claims, arguments presented by both parties, Tribunal's decision on pre-deposit, and the reasoning behind granting a stay on balance dues collection.