Dewsoft Overseas Pvt. Ltd. V. CST, New Delhi 2008 (12)
STR 730 (Tri.-Del.)
(i) The issue in the case related to whether providing online
computer training is classifiable as online information and data-based access
and retrieval service. As the essential character of the service provided
involved computer education through the medium of Internet, the service was not
restricted to merely providing online access to data or information and
therefore was classifiable as commercial training and coaching service. However,
Notification No. 9/03-ST, dated 20-6-2003 exempted computer training institutes,
the appellant’s activity was held as exempt.
(ii) The appellant provided the said services of computer
training through various franchisees. During the period under dispute, four
conditions were required to be fulfilled cumulatively in order to hold the
arrangement as ‘franchise’. The Tribunal held that the burden of proving that
all the conditions were fulfilled lay on the Revenue. Since the Revenue failed
to do so, the Tribunal held that no service tax was payable as the arrangement
could not be considered as ‘franchise’.
3. CENVAT Credit — whether credit for service tax paid on
cell phones, landline and courier services while providing output services of
maintenance and repairs allowable ?
No penalty where dispute relating to interpretation of
statute.
Wiptech Peripherals Pvt. Ltd. V. CCE, Rajkot 2008 (12)
STR 716 (Tri.-Ahmd.)
The Tribunal held that the issue relating to service tax on
cell phones or landlines was no more res integra and stood settled by
various Tribunal decisions. However, since the appellant was unable to establish
that cell phones in the names of individuals were exclusively used in relation
to output services, the matter was remanded to the original authority for
verifying the said facts.
The Tribunal held that no penalty can be levied when the
dispute relates to interpretation of the provisions of law, while setting aside
the penalty.
4. Institutes registered with UGC, whether considered commercial coaching
centre :
ICFAI v. CC & CE, Hyderabad-II, (2008) 17 STT 501
(Bang.-CESTAT)
The appellant, a non-profit society registered under the
State Societies Registration Act imparts education and awards degrees/diplomas
recognised by the law. Service tax was demanded under ‘Commercial Training &
Coaching Service’. The Commissioner held that absence of profit motive was an
immaterial factor and rejected the contention of the appellant. The appellant
contended that the Institutes were societies for educational purposes and their
surplus was pooled back for attainment of their objectives. ICFAI, Dehradun and
ICFAI, Tripura were recognised as universities under the affiliated universities
of Universities Grants Commission and the institutions were exempted from
payment of Income-tax u/s.12A or u/s.10(23C)(vi) of the Act. Circular No.
59/8/2003-ST, dated 20-6-2003 clarified that institutes or establishments which
issued certificate, diploma or degree recognised by law and provided training
for competitive examinations were outside the scope of service tax. The
difference between ‘education’ and ‘coaching or training’ was emphasised and
reliance was placed on Bihar Institute of Mining and Mine Surveying v. CIT,
(1994) 208 ITR 608 (Pat.) for the same. Further, replacement of the word
‘commercial concern’ with ‘any person’ w.e.f. 1-5-2006 had not been effected in
respect of ‘Commercial Training or Coaching Centre’ implied that an activity
could not be commercial in nature but intention to take it up could be, which
was not apparent in the case.
Against this, the Revenue contended that distinction between
‘education’ and ‘training’ was baseless relying on the decision in the case of
JMC Educational and Charitable Trust v. CCE, (2008) 12 STT 308 (Chennai-CESTAT)
where pre-deposit amount was demanded.
It was finally held that the appellant were imparting higher
education and conferred degrees recognised by law and had recognition from
various State Governments and UGC and as such, these services provided by
institutions registered under the Societies Registration Act for educational
purposes were outside the purview of the definition of commercial coaching. The
decision in the case of Great Lakes Institute of Management Ltd. V. CST,
(2008) 12 STT 306 (CESTAT–Chennai) was relied upon. The longer period was not
found invokable as the brochures and information available through website, etc.
Proved that evasion was not the intention.
5. Import of service :
ABS India Ltd. V. Commissioner of Service Tax, Bangalore,
2008 (13) STR 65 (Tri.-Bang.)
The appellant, an Indian company, booked orders for sale of goods manufactured by its subsidiary situated in Singapore and received certain commission for which they paid service tax initially. The appellant argued that service was deemed to be provided abroad as it could not be considered as delivered in India when the recipient was located abroad. Relying on Blue Star Ltd. v. Commissioner, 2008 (11) STR 23 (Tribunal), it was held that if the recipient is located abroad, the company situated abroad utilised the benefit of the service rendered by the Indian company was exported service and therefore not liable for service tax.
Unitech Ltd. v. CST, Delhi 2008 (12)STR752(Tri.-Del.)
The issue in this case related to:
i) Whether the definition of architect under the Act is capable of covering persons not registered as architects in India?
ii) Whether the assessee is liable to pay service tax as receiver of service?
It was held that definition of architect services under the Act is wide enough to cover commercial concerns engaged in rendering services in the field of architecture and therefore, the recipient received taxable services of architect for the purposes of the Finance Act, 1994.
The Tribunal further held that although comprehensive provisions for taxing import of services came when S. 66A was introduced on 18-4-2006and import rules were notified by Notification No. 11/2006-ST from 18-4-2006,but the taxable services provided in India by a foreigner or a non-resident not having any office or business establishment in India to any person in India are liable for service tax even prior to 18-4-2006 u/s.66 read with S. 65(105) of the Act by virtue of Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 read with Notification No. 36/2004-ST, dated 31-12-2004issued u/s.68(2) of the Finance Act, 1994 as recipient in India was liable for service tax with effect from 1-1-2005.
6. Refund:
K. C. Enterprises v. Commissioner of Central Excise, Vadodara 2009.(13) STR 39 (Tri.-Ahmd.)
The appeal was filed on the ground that during the period, the appellant had paid service tax for the amount billed for the services rendered rather than the amount actually received. The appellant was required to produce invoicewise details, date of receipt of actual amount along with cheque numbers or mode of payment, instead of merely submitting monthwise details showing amount billed and received. Further, the appellant failed to substantiate its claim by not submitting TR-6 challan with relevant documents and evidences of payment of tax to enable refund sanctioning. The appeal therefore was rejected.
