Appeal dismissed: Study material costs excluded from taxable services under Notification & Circular

The High Court dismissed the appeal, upholding the exclusion of the cost of study material from the taxable quantum of services in accordance with Notification No. 12/2003-ST and a circular issued by the Central Board of Excise and Customs. The court affirmed the Tribunal's decision to exclude the cost of specific study material supplied by Bulls Eye, as it could be quantified separately, aligning with the interpretation of the relevant notification and circular.

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Issues:
Challenge to order excluding cost of study material from taxable quantum of services under Central Excise Act, 1944.

Analysis:
The judgment delivered by the High Court addressed the challenge in the present appeal filed under section 35G of the Central Excise Act, 1944 regarding an order passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. The Tribunal had excluded the cost of study material from the taxable quantum of services provided by the assessee. The issue revolved around the interpretation of Notification No. 12/2003-ST, dated June 20, 2003, which exempted the value of goods and material sold by the service provider from service tax, subject to specific conditions.

The appellant contended that the circular issued by the Central Board of Excise and Customs on June 20, 2003, clarified that the exclusion of cost of books applied only to standard textbooks that are priced, not to study material or written text provided as part of the service. However, the Tribunal had rightly allowed the exclusion of the cost of study material supplied by a specific supplier, Bulls Eye, from the quantification of service tax. The court emphasized that the condition in the circular pertained to reading material and textbooks provided by the assessee-institute, not books purchased from an external supplier. As the study material supplied by Bulls Eye could be quantified separately, it was correctly excluded from the taxable quantum in accordance with Notification No. 12/2003-ST.

Ultimately, the High Court concluded that no substantial question of law arose for consideration in the appeal and dismissed the case. The judgment provided a clear interpretation of the relevant notification and circular, affirming the exclusion of the cost of specific study material from the taxable services, thereby upholding the decision of the Tribunal.

Judgment:
The High Court dismissed the appeal as it found that the exclusion of the cost of study material from the taxable quantum of services was in accordance with the provisions of Notification No. 12/2003-ST and the circular issued by the Central Board of Excise and Customs.

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