CESTAT confirms Service Tax demand for providing Taxable or Commercial Coaching Services against VEIL [Read Order]

CESTAT - Service - Tax - demand - Taxable - Services - VEIL - TAXSCAN

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) confirmed the service tax demand for providing taxable or commercial coaching services against Vikas Educational Institutions Ltd (VEIL), the respondent.

The present appeal has arisen out of show-cause notice vide which the demand of service tax of Rs.90 lakhs, towards the liability of the appellant for allegedly rendering commercial training and coaching services during the period 1.7.2003 to 31.3.2005, was proposed.

Pursuant to the directions of remand that the orderhas been passed by the Commissioner holding that the demand made against the respondent/assessee is not sustainable. Neither interest was levied nor penalty was imposed. Being aggrieved of the said order, Revenue is in appeal before this Tribunal.

The Counsel for the appellant (Revenue) contended that the Commissioner has apparently failed to appreciate the fact that both VEIL & Vikas Educational Society (VES) are one and the same. They have merely forged bills in order to evade payment of duty. Hence, the order holding that VEIL is not liable to pay service tax is liable to be set aside.

The Counsel further submitted thatthe assessee respondent himself had admitted Vikas Educational Institutions Ltd (VEIL) to be an interdependent organization of Vikas Educational Society (VES) for providing infrastructural facilities to VES. But payments have been received in the name of coaching fee/tuition fee by both the entities VES and VEIL though against separate receipts.

The commercial coaching has been provided against collecting same fees as has been collected by VEIL, respondents and though by VES also but through separate receipts. VES/VEIL are interdependent entities.

Irrespective of the fact that VEIL was providing infrastructural support to VES, but the fact remains is that VES could not provide said commercial coaching. Admittedly VEIL was collecting money from the students in the name of tuition fee only.

The Bench comprising PV Subba Rao, Technical Member and Dr Rachna Gupta, Judicial Member observed that “the demand of service tax for providing taxable/commercial coaching services against VEIL has wrongly been dropped by the Commissioner.”

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