1)Whether the appellant is liable to pay service tax in respect of the amounts received by him for the services rendered by him to other institutions as a visiting faculty member? 2) Whether the proprietary firm and the individual can be segregated purpo

PJ/Case Lawa/2012-13/1145

Case:- M/s PROFESSIONAL COACHING CLASSES CENTRE Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Citation: - 2012-TIOL-780-CESTAT-AHM
Issue: -

1)Whether the appellant is liable to pay service tax in respect of the amounts received by him for the services rendered by him to other institutions as a visiting faculty member?

2) Whether the proprietary firm and the individual can be segregated purpose for the purpose of service tax?

Brief fact: - This is a case where the evidences produced by the appellant as regards the demand for service tax because of revision of rate of service tax paid on 10.09.04 and in respect of demand for prior to 01.7.03 have not been considered. As regards the amount there is a dispute on the rate of service tax. The original adjudicating authority took the view that since payment was received after 10.09.04 service tax has to be paid. The appellant's contention was that these students had joined them in the month of August itself but had paid the fees in November or subsequently and therefore in their cases the service tax liability for the services rendered prior to 10.09.04 had to be calculated at lower rates and this is what has been done by them. This aspect has not been considered by both the lower authorities. As regards the service tax payment for the period prior to 1.7.03, it was submitted by the Id. chartered accountant that the accountant had originally calculated service tax payable for all the services received including services rendered prior to 1.7.03 and after finding out mistake
he had made reversal of the entries which has not been recognized by the department. The ld.
Chartered accountant also brought attention to the extract accounts submitted by him and submitted that all these evidences are required to be considered and a proper verification has to be done has not been done by both the lower authorities.

The appellant is seeking stay against recovery of the demand for service tax of Rs.51,799/- for the period from 1.4.03 to 31.3.07 with interest and penalties under Section 76 8b 78 of Finance Act, 1994.

Appellant Contention: - Theappeallant drew attention to the clarification issued by the Board vide Circular No.59/8/2003-ST dated 26.3.03 wherein it has been clarified that when individuals provide services at the premises of a service receiver, he would not be liable to service tax.

Respondent Contention:- The ld. A.R. submitted that this contention is not correct since the service was rendered by the appellant not in individual capacity but as a representative of the firm. Since the service was rendered by the firm which is basically a proprietary firm and income tax returns also included the income received for providing such services along with the income of the firm, the liability for service tax has been worked out correctly.

Reasoning of Judgment: In view of the facts that evidences have not been considered, the
matter has to be remanded to the original adjudicating authority. The Tribunal find that both the lower authorities have taken the stand which has been submitted before them by the ld. A.R. and in their opinion what is required to be examined is whether the proprietary firm and the individual can be segregated for this purpose or not and whether the service provided by the proprietor can be said to have been provided in his individual capacity and not as an employee or representative of the firm created by him for this purpose. One of the methods by which this can be verified is to see whether the payments for services rendered were received by the proprietor in his individual name or in the name of the proprietary firm. However, Tribunal would prefer to leave this issue open and leave it to the original adjudicating authority to consider afresh after considering the submissions to be made by the ld. chartered accountant before him since the matter is being remanded. In view of the above observations, the requirement of pre-deposit is waived, stay petition is allowed and matter is remanded to the original adjudicating authority for fresh consideration of the issue after giving reasonable opportunity to the appellant to make his submissions.

Decision: - Appeal allowed by remand

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PJ/Case Lawa/2012-13/1145

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