Tribunal: Scholarship amounts as fee discounts, not separate payments. Appellant wins case.

The Tribunal ruled in favor of the appellant, holding that the scholarship amounts given to students were to be considered as fee discounts and not as separate payments. It was determined that the appellant had paid service tax on the entire amount received for services provided, and the scholarship amounts were part of fee concessions to students. The Tribunal emphasized that the actual nature of the transaction was crucial for legal analysis, granting a full waiver of pre-deposit and staying the recovery of the demanded amount during the appeal process.

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Issues:
Service tax demand on scholarship/fee discounts/fee concessions given to students.
Applicability of service tax on the amount of scholarship/fee discounts/fee concessions.
Validity of demand for service tax on scholarship amounts.
Applicability of extended period for raising demand.

Analysis:

1. The appeal was filed against an order confirming a service tax demand on scholarship/fee discounts/fee concessions given to students for the period 1.4.2007 to 31.3.2012. The contention was that the appellant had not paid service tax on these amounts, which were considered as scholarship and not deductible from the assessable value.

2. The appellant argued that it had paid service tax on the entire gross amount received for providing commercial training or coaching service. The amounts termed as scholarship were actually fee concessions or discounts given to students. It was emphasized that there was no wilful mis-statement or suppression of facts, thus the extended period for raising the demand should not be applicable.

3. The respondent contended that scholarship amounts given to students should not be deducted from the full fee charged. The argument was that scholarship is an amount given to students and should not be considered as part of the fee charged from the students.

4. The Tribunal analyzed the contentions of both parties and found that the appellant had indeed paid service tax on the entire amount received for the services provided. The scholarship amounts were deemed as fee discounts granted to certain students, not as separate payments to students. The Tribunal emphasized that the actual nature of the transaction, not the name given to it, is crucial for legal analysis. Therefore, the Tribunal concluded that the appellant had a strong prima facie case in its favor. As a result, full waiver of pre-deposit was granted, and recovery of the demanded amount was stayed during the pendency of the appeal.

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