2019 (7) TMI 1480 - AT - Service Tax

Non-payment of Service tax - amount collected by them from the students - Commercial Coaching and Training Services - exemption under N/N. 24/2004-ST dated 10.09.2004 - HELD THAT - The assessee is not entitled to deductions on account of sale of books, registration fee, examination fee etc., because no amounts were collected under these heads and gross amount for total services rendered were invoiced to the students by the assessee. Service tax is leviable on the gross amount charged. Assessee is also not entitled to the benefit of exemption notification 24/2004-ST dated 10.09.2004 for the period prior to 07.06.2005 because they were not clearly covered by the exemption notification. Appeal dismissed - decided against appellant.

Summary

Issues:
- Challenge of demand of service tax and penalty by assessee
- Department's grievance regarding exemption notification benefit

Analysis:
1. The appeals were filed by the assessee and department against the same Order-in-Appeal. The assessee contested the service tax demand and penalty imposed for a specific period, while the department disputed the allowance of exemption notification benefit to the assessee for a different period.

2. The case involved the assessee providing commercial training services related to software. Following a search, it was revealed that the assessee had not fully disclosed the value of taxable services rendered, leading to discrepancies in taxable values for various years.

3. During the investigation, it was found that the assessee had not paid service tax on amounts received from students for study materials, claiming exemption. However, it was observed that the study materials were not separately priced, and the entire amount collected was considered part of the training services.

4. The Order-in-Original demanded differential service tax and penalties, which were confirmed in subsequent orders. The Commissioner (Appeals) partially allowed the assessee's claim based on exemption notifications, leading to the current appeals.

5. The Tribunal found that the assessee had not discharged service tax on the total amount collected from students for commercial training services, as they claimed certain components were exempt. However, these components were integral to the training services and not separately invoiced.

6. The Tribunal analyzed the exemption notification and the subsequent proviso, determining that computer training institutes were not covered under the exemption prior to the proviso's introduction. As such, the assessee was not entitled to the benefit of the exemption notification for the relevant period.

7. Consequently, the Tribunal held that the assessee was liable to pay service tax on the entire amount collected and was not entitled to deductions for specific components. The department's appeal was allowed, and the assessee's appeal was rejected.

8. The judgment emphasized strict interpretation of exemption notifications, resolving the ambiguity in favor of revenue. The decision highlighted that the assessee was not eligible for the exemption benefit due to the specific provisions of the notification.

9. Ultimately, the Tribunal upheld the department's appeal and dismissed the assessee's appeal, concluding the case in favor of the department.