2018 (2) TMI 1049 - AT - Service Tax

Liability of service tax - Commercial training and coaching service - full Service Tax liability on the gross value received by the students has been discharged by MAAC - Held that - the appellant do not receive any amount from the service recipient as a consideration. The arrangement is that the gross amount paid by the students is credited to MAAC on which Service Tax has been discharged - It is clear that the appellant acts as an instrument in carrying out the training programme which is designed and managed by the MAAC - All these facts will indicate that MAAC is overall managing and the commercial coaching and training service suffered tax at their hands - no liability arises in the hands of appellant. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Dispute over Service Tax liability for commercial training or coaching service
- Interpretation of contractual arrangement between the parties
- Applicability of Service Tax on the appellant
- Consideration received for coaching services
- Comparison with similar cases involving MAAC

Analysis:

The case involves a dispute regarding the Service Tax liability for commercial training or coaching service provided by the appellant in collaboration with Maya Academy of Advanced Cinematics (MAAC). The Revenue claimed that the appellant failed to discharge Service Tax obligations, leading to demands and penalties. The original authority initially ruled in favor of the appellant, stating that MAAC had already paid the full Service Tax liability on the gross amount received from students. However, the impugned order reversed this decision, imposing a Service Tax liability of &8377; 31,53,810 covering multiple years and penalties under Sections 76, 77 & 78.

The appellant argued that they only received a portion of the gross consideration for managing and conducting the course under the agreement with MAAC. They highlighted that MAAC had already discharged the Service Tax liability on the full consideration received from students. Additionally, the appellant's premises were registered for Service Tax liability under MAAC's central registration, further supporting their position.

The Tribunal noted that the full consideration received from students was credited to MAAC, which had already paid the Service Tax on the amount. The Tribunal emphasized that the appellant did not directly receive any consideration from the students and acted as an instrument in carrying out the training program managed by MAAC. This was evident from the course completion certificates issued by MAAC, where the appellant's name did not appear. The Tribunal also referenced a similar case involving another business partner of MAAC, where no Service Tax liability was imposed under similar circumstances.

After thorough analysis, the Tribunal found no merit in upholding the Service Tax liability against the appellant. The impugned order was set aside, and the original order absolving the appellant from the tax liability was restored. The appeal was allowed, emphasizing the absence of a direct service provider-service recipient relationship between the appellant and the students, as the gross consideration was managed and taxed by MAAC.