Inclusion of Value of Books sold in Assessable Value of Coaching Service provided

PJ/Case Laws/2012-13/1010

Case: BRILLIANCE COLLEGE versus COMMISSIONER OF CENTRAL EXCISE, TRIVANDRUM

Citation: 2011 (24) S.T.R. 450 (Tri. -Bang.)

Issue:- Commercial Coaching center selling books, notes etc independently to non-students – whether value of books, notes etc to be included in assessable value of the service?

Brief Facts:- Appellant is providing coaching and the said coaching classes also have their own publications and they sell books independently. Revenue demanded service tax with interest for the period from 2003 -2007, 2007-2008 and for the period April, 2008 to March, 2009 on the value of books, notes and subscription to journals. Demand was confirmed and penalties were imposed.

Appellant is before the Tribunal and stay petitions are filed for the waiver of pre-deposit of the amounts demanded.

Appellant’s Contention:- Appellant submitted that the demand of the Service Tax has arisen on the value which has been considered by the authorities to be included in the services rendered by them forgetting the fact that the said value is for the sale of products like books, notes, etc., to students other then the ones who have enrolled in their classes.

Appellant also submitted that the benefit of Notification No. 12/2003 will be applicable and the reliance placed by the adjudicating authority on the Board's Circular dated 20th June, 2003 is irrelevant.

Appellant also relied on the interim order passed by the Coordinate Bench in the case of M/s. Chate Coaching Classes Pvt. Ltd. v. C.C.E., Aurangabad [2007-TIOL-1714-CE5TAT-MUM] on an identical issue.

Reasoning of Judgment:- The Tribunal perused the impugned order and found that there is no denial that the appellant had discharged the Service Tax liability under 'commercial training or coaching services' as per the returns filed by him. The Adjudicating Authority wanted to include the value of the books and notes and subscription to journals, etc., to the aggregate value of taxable service. It is the appellant's claim before the adjudicating authority that this business of the appellant is an independent business and is not a part of the commercial coaching class and, that the publishers were selling these books all over the State of Kerala in various book stalls.

The Tribunal found that appellant’s contention has not been considered by the Adjudicating Authority in its proper perspective and has only relied upon the Board's Circular dated 20th June, 2003 which indicates that the cost of standard text books should be deducted from the value of the taxable service. Prima facie, the Tribunal found that in this case, sale of books, journals and other materials by the assessee to the general public and students of their classes cannot form the value of the taxable service for the purpose of taxing under the Commercial Training or Coaching service.

Decision:- Stay granted and Pre-deposit waived.

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PJ/Case Laws/2012-13/1010

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