The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)has held that service tax is not leviable on consideration received on Publication of Section L, as the value of the sale of the book separately identifiable from audited financials statements.
M/s. Kanhaiya Singh Vision Classes Private Limited, the Appellant is engaged in providing coaching services to aspiring students for qualifying for the competitive entrance examinations into the engineering/medical institutes and is thus registered under the service tax regime having registration no. AADCK9129JSD001.
A show cause notice was served alleging non/short payment of service tax on coaching services based on the documents seized by the department. It was alleged that the Appellant has artificially bifurcated the consideration received towards coaching services (under the head tuition fee from students) into other categories such as Income from Bag trade, Sale of I Card, Sale of Prospectus/Form and Publication Section L.
It was alleged that the Appellant is also liable to pay service tax on consideration received towards Publication Section L, the major being the income from the sale of publication Section L. It was also alleged that the Appellant has reported less turnover in their audited financial statement for certain years and thus the demand came to be calculated based on the documents seized by the department by ignoring the audited financial statements.
The Appellant had replied that the value of the sale of books cannot be included in the value of coaching services as the same wasthe sale of goods and cannot be taxed as per Notification No. 12/2003-ST dated 20.06.2003. The Adjudicating authority confirmed the demand for tax with an equivalent penalty.
In the case of M/s Chate Coaching Classes Pvt. Ltd., it was held that the amount collected by the appellant by selling study material is not a taxable service under the Finance Act, 1994.
A two-member bench comprising Shri P K Choudhary, (Judicial) and Shri K Anpazhakan, (Technical) held that since the value of the sale of books is separately identifiable from the audited financial statements of the Appellant and there are documents to show that such sale was also made not to the students but to third parties, the question of levy of service tax on such value from sale of books/publication cannot be sustained.
While allowing the appeal, the CESTAT set aside the impugned order.
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