CESTAT, MUMBAI BENCH
Chate Coaching Classes (P.) Ltd.
Commissioner of Central Excise, Aurangabad
Order Nos. A/306-307 of 2012/WZB/CSTB/C-I
Appeal NoS. ST/126 of 2007 and ST/CO/226 of 2007†
April 2, 2012
Ashok Jindal, Judicial Member
By this appeal, the appellant is challenging the order of confirmation of a demand of service tax of Rs. 2,82,46,874/- along with interest and penalties under Sections 76 and 78 of the Finance Act, 1994.
2. The facts of the case are that the appellant is engaged in providing the service of commercial training and coaching. On the basis of intelligence that the appellant is providing study material to students and the value of the said material has not been included in the assessable value of the services, therefore investigation was conducted and it was found that the appellant is availing the benefit of Notification NO.12/2003-ST dated 20.6.2003. As per para 2.9.1 of the Board circular No.59/8/2003 dated 20.6.2003, the appellant is not entitled for exemption under Notification 12/2003 dated 20.6.2003 and exemption is available only in case the commercial coaching and training classes available to the standard textbooks as this study material is provided by the institute as part of their service, therefore the value of this service material is includible in the value of taxable service. Accordingly, a show cause notice was issued which was adjudicated and the impugned demand is confirmed.
3. The respondent has filed cross objections to the appeal.
4. On behalf of the appellant, Shri M.H.Patil, learned counsel, appeared before us and submitted that the appellant is entitled for the benefit of Notification No. 12/2003-ST dated 20.6.2003 which exempts from the value of taxable service equal to the value of goods and material sold by the service provider to the recipient of service from the service tax leviable thereon subject to the condition that there is documentary proof specifically indicating the value of the said goods and materials. He further submitted that it is not in dispute that the appellant has shown the value of the material supplied in the invoice separately, therefore they have fulfilled the condition of Notification 12/2003. Therefore, they are entitled for the benefit of the said Notification and the impugned order is to be set aside. He also relied on the decision of the Tribunal in the case of Pinnacle v. CCE [Final Order No. ST/423/2011 (PB), dated 30-8-2011] wherein the said issue came up before the Tribunal and the Tribunal allowed the benefit of Notification 12/2003 to the assessee.
5. On the other hand, Shri Navneet, learned AR, strongly opposed to the contention of the learned counsel and submitted that it is a case that the appellant has supplied study material as a part of their service and, therefore, the same is includible in the assessable value. Therefore, the appellant is not entitled for any benefit of the said Notification.
6. Heard both sides and gone through Notification NO.12/2003-ST dated 20.6.2003, which is reproduced below:-
“Notification: 12/2003-S.T. dated 20-Jun-2003 Valuation (Service Tax -Goods and materials sold by service provider to recipient of service – Value thereof, exempted In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts so much of the value of all the taxable services, as is equal to the value of goods and materials sold by the service provider to the recipient of service, from the service leviable thereon under section 66 of the said Act, subject to condition that there is documentary proof specifically indicating the value of the said goods and materials.
2. This notification shall come into force on the 1 st day of July,2003.”
The department has issued clarification vide circular No.59/8/2003-ST dated 20.6.2003 and as per the said clarification, it was clarified that in case of commercial training and coaching institutes, the exclusion shall apply only to the sale value of standard textbooks, which are priced. Any study material or written text provided by such institute as a part of service which does not satisfy the above criteria will be subjected to service tax. On the basis of this clarification, the demand has been confirmed against the appellant. The said issue came up before this Tribunal in the case of Pinnacle (supra) and the same was considered in para 8 of the said decision and it was observed that “It is not in dispute that the activity of the company is to provide coaching. The Revenue has not disputed the fact that the study materials were purchased by the appellants from M/s. Bulls Eye. Therefore, there is nothing in the Notification No. 12/2003.-ST which would help Revenue in their arguments. The Circular of CBEC quoted by the learned DR states that such exemption will be applicable only if material sold is ‘standard textbooks’. The question as to what is a ‘standard textbook’ can lead to disputes. Since the expression is not used in the notification and the fact that the books sold are of another entity namely “Bulls Eye’, we do not find any reason to deny the benefits of the Notification No.l2/2003-ST.”
7. In this case also, we find that the study material has been sold by Chate Publications Pvt. Ltd. to the appellant and relying on the decision of Pinnacle (supra), we hold that the appellant is entitled for the benefit of Notification NO.12/2003-ST dated 20.6.2003. Accordingly, we do not find any merit in the impugned order and the same is set aside. The appeal is allowed. The cross objections are disposed of in the above terms.