Case Law Details
M/s Smart Value Products & Services Ltd. Vs Commissioner of Central Goods & Service Tax (CESTAT Allahabad)
Facts of the case are not in dispute that the coaching centers are registered coaching center and provide services to their students. The coaching centers are also private limited companies and having separate identity known by the Registrar of Companies. We further take note on the fact that appellant is engaged in only selling of study material to the students of these coaching centers and paying VAT on sale of these study material. Therefore, in the light of decision of this Tribunal in the case of M/s Chate Coaching Classes Pvt. Ltd. (Supra), the amount collected by the appellant by selling of study material is not taxable service under the Finance Act, 1944. The case of the Revenue is that the coaching centers are up front companies of the appellant is not acceptable that these coaching centers are independently providing coaching services to their students and on the fees collected by them, they are paying service tax. In that circumstances, it cannot be said that these coaching centers or up front companies of the appellant and the appellant is liable to pay service tax on the payment of sale of study material. Therefore, we hold that the whole case of the Revenue is without basis.
FULL TEXT OF THE CESTAT JUDGMENT
The appellant is in appeal against the impugned order wherein service tax has been demanded against them under the category of ‘Commercial Training & Coaching Services’ for the period 1st April, 2009 to 31st March, 2014 by issuance of show cause notice dated 21st October, 2014 along with interest and various penalties have also been imposed.
2. The facts of the case are that the appellant is a service provider and engaged in the selling of Healthcare, Lifestyle, Homecare, Personal care products through network marketing. The appellant also engaged in selling of study material on behalf of companies namely M/s Asia Pacific Leaner Ltd. (M/s APPL), M/s APLL Educational Service Pvt. Ltd. M/s APLL Learning Solutions Pvt. Ltd. (in short M/s APLL) The case of the Revenue is that the appellant themselves are engaged in providing IT Education through these up front companies i.e. M/s APLL. Therefore, it was alleged that all the educational services has been provided by the appellant through their companies the study material has been sold by the appellant is nothing lest it is as gamut of the appellant to avoid payment of service tax on sale of study material related to IT Education services. Therefore, the show cause notice was issued to the appellant to demand service tax on the amount of sale of study material by the appellant on behalf of these three companies mentioned hereinabove under the category of ‘Commercial Coaching or Training Services’ by invoking the extended period of limitation. The matter was adjudicated. The demand of service tax was confirmed along with interest and penalties were also imposed. Against the said order, the appellant is before us.
3. The learned counsel of the appellant submits that the appellant is selling study materials for the coaching centers which are providing coaching services. The appellant is selling study material independently and have no nexus with the coaching institutes who are separately registered companies with Registrar of Companies, Income Tax Department, Education Department and with all other statutory bodies for providing coaching services the appellant is only selling study material for the students who are enrolled themselves for providing coaching with these coaching institutes namely M/s APLL. The appellant have no nexus with these companies and appellant is selling study material and nor providing any service to the students or to these companies namely M/s APLL. Therefore, service tax is not payable by the appellant. The learned Counsel for the appellant also submits that same demand has been confirmed on all the reimbursable expenses. In this regards he clarified that in some cases the student purchases of study material from the appellant, later on, the students returned the said study material. On returned study material, the appellant deducted the certain amount and that amount does not pertain any liability of service tax, as pertains to the activity of sale or purchase of study material by the appellant. It is further submitted that the coaching centers which are held that up front companies of the appellant, are paying the service tax on the fees collected by them from the students directly. In that circumstances, it cannot be said that these coaching centers one up front companies of the appellant. Therefore, no demand of service tax is sustainable against for the activity in question against the appellant. He also submits that for sale of study material, no service tax is payable, as held by this Tribunal in the case of M/s Chate Coaching Classes Pvt. Ltd. Vs Commissioner of Central Excise, Aurangabad reported at 2013 (29) S.T.R. 138 (Tri.-Mum.).
4. On the other hand learned A.R. reiterated the finding of the impugned order.
5. Heard the parties and considered the submission in
6. On perusal of record, we find that facts of the case are not in dispute that the coaching centers are registered coaching center and provide services to their students. The coaching centers are also private limited companies and having separate identity known by the Registrar of Companies. We further take note on the fact that appellant is engaged in only selling of study material to the students of these coaching centers and paying VAT on sale of these study material. Therefore, in the light of decision of this Tribunal in the case of M/s Chate Coaching Classes Pvt. Ltd. (Supra), the amount collected by the appellant by selling of study material is not taxable service under the Finance Act, 1944. The case of the Revenue is that the coaching centers are up front companies of the appellant is not acceptable that these coaching centers are independently providing coaching services to their students and on the fees collected by them, they are paying service tax. In that circumstances, it cannot be said that these coaching centers or up front companies of the appellant and the appellant is liable to pay service tax on the payment of sale of study material. Therefore, we hold that the whole case of the Revenue is without basis.
7. In that circumstances, we set aside the impugned order and allow the appeal with consequential relief to the appellant, if any.
(Dictated & Pronounced in Court)
