Tribunal rules in favor of appellant, setting aside service tax demand on study material supplied to students.

The Tribunal ruled in favor of the appellant, setting aside the demand for service tax on study material supplied to students in coaching centers. The decision highlighted the statutory exemption and deemed the demand unsustainable, emphasizing that the study material qualified as standard textbooks despite contrary assertions by the Revenue. The appellant successfully challenged the Commissioner's decision, with the Tribunal granting the appeal and providing consequential relief.

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Issues:
Whether the appellant is liable to pay service tax on study material supplied to students in coaching centers.

Analysis:
The appellant, engaged in providing coaching services, was alleged to have short-paid service tax on various items, including study material supplied to students. Initially, the demand for service tax on study material was dropped, citing the sale of study materials to students with invoices raised and eligibility for a specific notification. However, the department filed a revision, leading to the Commissioner confirming the demand. The appellant challenged this before the Tribunal.

The appellant's counsel argued that the study material was sold by the appellant, with invoices raised reflecting the value, and that the materials were sold to students as part of their institute services. The counsel contended that the denial of the benefit of a particular notification was erroneous, citing a relevant decision by CESTAT. On the other hand, the Revenue supported the Commissioner's decision, asserting that the study material did not qualify as standard textbooks as per a specific circular.

After hearing both sides, the Tribunal noted that the study material's sale value was separately shown in the invoices. The crucial point of contention was whether the materials qualified as standard textbooks based on the Board's circular. Referring to a previous judgment on a similar issue, the Tribunal held that the Board's circular was illegal and contrary to the statutory exemption granted by the notification. Consequently, the Tribunal ruled in favor of the appellant, setting aside the demand for service tax on study material. The appeal was allowed with any consequential relief.

In conclusion, the Tribunal's decision clarified the issue of liability for service tax on study material supplied by coaching centers to students. The judgment emphasized the importance of statutory exemptions and held that the demand for service tax on study material was not sustainable in this case, based on a previous relevant judgment.

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