Tribunal waives service tax on 'abacus' franchise service, stays recovery pending appeal

The Tribunal allowed the appellant's application for waiver of pre-deposit of service tax, interest, and penalties amounting to Rs. 30,20,604 imposed for providing Franchisee service of selling 'abacus' system. The Tribunal considered the activity akin to a recreational program rather than 'Commercial Training or Coaching' services, citing a precedent in favor of the appellant. Consequently, the recovery of the amounts was stayed pending appeal disposal.

---

---

Issues:
1. Waiver of pre-deposit of service tax, interest, and penalties.
2. Applicability of service tax on Franchisee service of selling 'abacus' system.
3. Interpretation of 'Commercial Training or Coaching' services.

Analysis:
The judgment pertains to a stay petition for the waiver of pre-deposit of service tax, interest, and penalties amounting to Rs. 30,20,604, imposed on the appellant for rendering Franchisee service of selling 'abacus' system of arithmetic calculation. The adjudicating authority confirmed the demand based on the nature of the service provided. The appellant relied on a previous case, Fast Arithmetic v. Asstt. CCE, where a similar issue was settled in favor of the assessee. The appellant argued that the activity falls under a recreational program rather than 'Commercial Training or Coaching' services, as contended by the authorities.

Upon careful consideration of the submissions, the Tribunal observed that the lower authorities sought to levy service tax on the activity of teaching mathematics through the 'abacus' training program under the category of 'Commercial Training or Coaching' services. However, the Tribunal found that the decision in the case of Fast Arithmetic prima facie favored the assessee's position. Consequently, the Tribunal concluded that the appellant had established a prima facie case for the waiver of pre-deposit. As a result, the application for the waiver of pre-deposit of the amounts involved was allowed, and the recovery of the said amounts was stayed pending the disposal of the appeal.

---