Sale of Prospectus not a Part of Commercial Training or Coaching Services: CESTAT [Read Order]

In True Education Institute Pvt. Ltd vs. Commissioner of Service Tax, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the sale of the prospectus is not a part of the Commercial Training or Coaching Services.

The Appellant, True Education Institute Pvt. Ltd provides Commercial Training or Coaching Services to students. As part of their business, they sell prospectus of their institute containing all relevant information about the Institute and the courses offered by them. The Revenue included the sales value of the prospectus in the assessable value of services. Service Tax demands were raised and on failure to pay the same, penalties were imposed. The demands were affirmed by the adjudicating authority. The assessee appealed before the Commissioner (Appeals) against the order. The appeal was rejected.  Thereafter the assessee preferred an appeal to CESTAT.

The Counsel for the appellant, Rajiv Luthia CA submitted that Demand for Service Tax was not sustainable as the sale of the prospectus cannot be treated as services. He pointed out that such activity is covered under the Maharashtra Value Added Tax Act, 2002.

The Counsel for the Respondent, M. Suresh, DC, reiterated the findings of the lower authorities. Reliance was also placed upon the tribunal judgment in case of Vigyan Gurukal.(2009).

The Bench Comprising of Judicial Member Ramesh Nair and Technical Member Raju observed “After appreciating the submissions made by both the sides we find that the sale of prospectus is not a part of the Commercial Training or Coaching Services’ as held in the precedent judgment of this Tribunal in case of Balaji Society 2014 (10) TMI 64 CESTAT – MUMBAI. Further, we find that the prospectus is only for the purpose of screening of students by way of Admission Screening Examination and is not a part of the services. The student only by filling of prospectus does not become entitled to get coaching from the Appellant. Hence the same cannot be considered as part of Commercial Training or Coaching Services’. Further, we also find that no evidence has been shown to substantiate the charges for invoking demand for the extended period or imposition of penalty. Since we are of the view that the sale of the prospectus is not part of services rendered by the Appellant, we set aside the demand and penalty. Accordingly, the impugned order is set aside and appeals are allowed with consequential reliefs if any.”