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TMI Blog2013 (8) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... ching and training centres and get a portion of the fee collected from the students - From the Appellant's contract with CLIL, it appears that the appellant cannot be said to be an agent of CLIL and the transaction between them are on principal to principal basis. Tuition fees - Whether appellant would be liable to pay service tax on the amount of 25% of the tuition fee being received by them – held that:- There is no dispute that the service tax is sought to be charged on 25% of the amount of tuition fee being received by CLIL from the students through the appellant have already paid service tax on that amount. Waiver of pre deposit - prima facie case is there in the favour of appellant – waiver of pre deposit allowed – stay applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the appellant. The department was of the view that the appellant are providing the business auxiliary services to CLIL which is taxable under Rule 65(105)(zzb) of the Finance Act, 1994. Since the appellant had neither taken service tax registration nor were paying any service tax, the department issued a show cause notice dated 17.3.2011 to the appellant for demand of service tax along with education cess amounting to Rs.96,66,613/- along with interest thereon and also for imposition of penalty on them under Sections 76, 77 and 78 of the Finance Act. The service tax was sought to be charged on 25% of the amount being received by the appellant from CLIL. The show cause notice was adjudicated by the Commissioner vide order-in-original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant would not be liable to pay any service tax, that in this regard he relies upon the Board's Circular No.109/3/09/ST dated 23.02.2009 wherein the Board has clarified that the revenue sharing arrangement is not liable to service tax, that the appellant are not operating the professional coaching centres on behalf of CLIL, as the transaction between the appellant and the CLIL are on principal to principal basis and hence the appellant cannot be said to have provided a services on behalf of CLIL, that for charging service tax in terms of Section 65 (19) (vi) read with Section 65 (105) (zzb) of the Finance Act, 1994, it has to be proved that the services has been provided on behalf of the client, that the term "on behalf of connotes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stay application by reiterating the findings of the Commissioner in the impugned order and pleaded that the appellant by operating the coaching centres for CLIL have provided the services of business auxiliary services taxable under Section 65 (105) (zzb) with Section 65 (19)(vi) of the Finance Act, 1994, that the appellant cannot be called a sub-contractor, that just because CLIL would be eligible for cenvat credit of the service tax paid by the appellant, this cannot be the reason for non-payment of service tax by the appellant, that by not obtaining service tax registration and not filing any return, the appellant have suppressed the relevant facts from the department and hence, longer limitation period has been correctly invoked and pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipal basis one does not provide service for another and such activities are not covered under service tax. From the Appellant's contract with CLIL, it appears that the appellant cannot be said to be an agent of CLIL and the transaction between them are on principal to principal basis. We are, therefore, of the view that the above circular of the Board is applicable to the facts of the case. Moreover, even if the service tax is charged from the appellant by treating their activity as business auxiliary service, CLIL would be liable for its cenvat credit. There is also no dispute that the service tax is sought to be charged on 25% of the amount of tuition fee being received by CLIL from the students through the appellant and CLIL have alr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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