Tribunal upholds Order-in-Appeal on service tax for Training Institutes, invalidates 2003 circular

The Tribunal upheld the Order-in-Appeal, dismissing all revenue appeals regarding the levy of service tax on the sale of books and study material by Commercial Training and Coaching Institutes. The Tribunal concluded that the 2007 circular superseded the 2003 circular, invalidating the latter post-2007. Consequently, the demand and penalty imposed by the original authority after 2007 were set aside. The Tribunal found no error in the Commissioner's decision and disposed of all cross objections.

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Issues:
Appeals arising from a common impugned order regarding service tax on sale of books and study material under Commercial Training and Coaching Institutes.

Analysis:
The appeals were filed by revenue against the Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Lucknow. The respondents were providing taxable services under Commercial Training and Coaching Institutes and were paying service tax on coaching fees. Revenue contended that service tax should also be levied on the sale of books and study material. The original authority relied on a circular stating that service tax is not chargeable on standard textbooks but is applicable on study material provided by service providers. The Commissioner (Appeals) held that the circular from 2003 was no longer valid as a Master Circular from 2007 superseded it. Consequently, the Commissioner set aside the demand and penalty imposed by the original authority post-2007. Dissatisfied with this decision, the revenue appealed to the Tribunal.

Upon hearing the arguments and examining the records, the Tribunal found that the ground of appeal merely repeated the show cause notice without addressing the Commissioner's finding on the validity of the 2003 circular post-2007. The Tribunal referred to the 2007 circular, which clearly stated that it superseded all previous circulars and clarifications on technical issues related to service tax. Consequently, the Tribunal upheld the Order-in-Appeal dated 16.04.2012, dismissing all three appeals filed by revenue and disposing of all cross objections.

In conclusion, the Tribunal's decision was based on the fact that the 2007 circular superseded the 2003 circular, rendering the latter invalid post-2007. As a result, the demand and penalty imposed by the original authority were set aside for the period after 2007. The Tribunal found no fault in the Commissioner's decision and dismissed the revenue's appeals.

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