By TIOL News Service

MUMBAI, MAR 24, 2014: THE applicant is registered Service Tax assessee under the category of “Commercial Training or Coaching Service” and paying appropriate service tax. The case of the Revenue is that during the period 2006-2012 the applicant had sold prospectus and admission forms for a consideration and had not paid service tax on such consideration.

The adjudicating authority confirmed the demand of Rs.5,17,707/- along with interest and penalty.

The Commissioner (Appeals) directed the appellant to deposit service tax along with interest but since the appellant failed to comply with the condition of the stay order, the appeal was dismissed by the Commissioner (Appeals) without going into merits.

Before the CESTAT, the appellant submitted -

++ Sale of prospectus and admission forms cannot be considered as commercial training and coaching services.

++ Prospectus is sold for consideration to many students who desire to take admission.

++ Some of the students may not apply for admission though they have purchased the prospectus and those who applied for admission may not get admission due to limited number of seats. Therefore, consideration amount received by sale of prospectus and form cannot be considered as part of commercial training and coaching services.

The Bench observed -

"5. We find that the demand is for consideration amount received by sale of prospectus and admission forms. Prima facie we find merit in the contention of the appellant that the same cannot be considered as part of service provided. In these circumstances, pre-deposit of dues is waived and recovery thereof is stayed during the pendency of the appeal."

However, since the Commissioner (Appeals) had not considered the matter on merits, the CESTAT set aside the order and remanded the matter to the Commissioner (Appeals) to decide the appeal on merits.

In fine, the Appeal was allowed by way of remand.

In passing: Give me eight hours to chop down a tree and I will spend the first six in sharpening the axe - Abraham Lincoln

(See 2014-TIOL-443-CESTAT-MUM)