The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the quashing of the demand of service tax on service of examining the ground of non-falling of service under ‘management or business consultant service.
MeritTrac Services Private Limited, the appellant assessee are engaged in the business of evaluating skills, abilities, and knowledge for specific skills in the organization through the use of scientifically developed assessment tools, that as part of services to educational institutions, conducted examinations by themselves or assisted university/ college in conducting the examination.
The revenue appealed against the order passed by the Commissioner for dropping the demand of service tax on the assessee for conducting the examination services.
Dyamappa Airani, the counsel for the department contended that the respondent though rendered service under the taxable category of ‘Management or Business Consultant service’ as defined under Section 65(65) of the Finance Act,1994, but wrongly claimed the benefit of exemption Notification applicable to Business Auxiliary service.
Further submitted that the Commissioner in the impugned order failed to take note of the fact that the assessee was providing Management or Business Consultant Services.
K.S. Ravishankar, K.S. Naveen Kumar, and N. Anand, the counsels for the assessee contended that the assessee’s role was limited to the extent of undertaking examinations for the universities and identifying the talent through exams for admission into the said universities.
Also submitted that the services rendered by the assessee would not come within the scope of ‘Management or Business Consultant Service as the services rendered by the assessee are more or less executory.
The Bench observed that the service of examining by the assessee was a part of educational activity imparted by the said Universities and cannot come under the scope of Management or Business Consultant Service but falls under the scope of Business Auxiliary Service.
The two-member bench comprising D.M Misra (Judicial) and Bhagya Devi (Technical) quashed the demand for service tax raised by the department and upheld the decision of the Commissioner (Appeals).
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