Case Law Details
M/s Jet king Info train Ltd Vs. CC Delhi (CESTAT Delhi)
The only issue for decision is whether or not the appellants are right in their claim for exemption under Notification No. 12/2003. Notification No. 12/2003 provides for exemption of Service Tax for “so much of the value of all taxable services, as it is equal to the value of goods and materials sold by the service provider to the recipient of service from the Service Tax leviable therein under Section 66 of the Act, subject to the condition that there is documentary proof specifically indicating the value of said goods and materials.” In the present case, one of the grounds for denial of exemption is lack of documentary evidence as required for the Notification. In this regard, we have perused various sample invoices raised by the appellant to the franchisee. Various books and materials were sold and their price specifically indicated in the said invoices. Hence the claim of the appellant that they have sold the books and study materials as per the commercial invoices stands established. However, the total quantum of such sale can be verified with all the supporting evidence to determine the correct quantum of exemption available to the appellant. This can be done by the jurisdictional assessing authority.
FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-
The appeal is against order dated 13.01.2014 of Commissioner of Service Tax (Adj.), New Delhi. The appellant, a Public Limited Company, are engaged in Information Technology Training in hardware and networking for the past many years. The appellants are operating their teaching centers under the name and design “Jet king”. They are registered with the Service Tax Department under the category of “Commercial Training or Coaching Service” and “Franchise Services”. The appellants operate their own training center and also operate through franchise. For the income received from the franchise, the appellants are paying Service Tax. The appellants are not paying service tax on the consideration received for sale of books and materials to the franchise. For this, they claimed exemption under Notification No. 12/2003 ST dated 20.06.2003.
2. The Revenue entertained a view that the appellants were not discharging service tax under franchise service on the full consideration. In other words, it is held that the exemption of value of books and materials, claimed to have been sold by the appellant, is not available to them as these are not supported by documentary evidence. It was also held that the educational training materials were developed by the appellants and when they are providing service of commercial coaching or training, they were paying tax including the value of such When such training is imparted by the franchise, they provided prospectus, course materials, brochures, leaflets which are printed and supplied by them to the franchise. Since the franchise agreement stipulates that the course materials are to be given by the franchiser free of cost to every registered student, the exemption claimed under sale of goods in terms of Notification No. 12/2003 is not available. On these basis, the Revenue proceeded against the appellant and confirmed the differential Service Tax liability of Rs. 1,53,70,166/- with equal amount of penalty under Section 78 and further penalty under Section 77 of the Finance Act, 1994.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
