Separate sale of books and study materials cannot be clubbed with coaching service value for service tax.

Books and study materials sold separately from coaching services cannot be included in the taxable value of commercial training or coaching service when the evidence shows distinct publication and coaching activities. Certified accounts, sample invoices and fee receipts established that student receipts covered coaching charges only, while the sale of books and publications was a separate business activity. Mere accounting consolidation in the balance sheet was insufficient to justify clubbing the two components, so the service tax demand based on inclusion of study material value was unsustainable.

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Issues: Whether the value of books and study materials sold by the appellant could be included in the gross value of commercial training or coaching services for levy of service tax.

Analysis: The appellant produced trial balance sheets certified by a chartered accountant, sample sale invoices for books and publications, and fee receipts evidencing coaching charges. These materials showed that the publication business and the coaching activity were carried on as separate activities, from the same or different outlets, and that the receipts from students did not establish any separate collection towards the value of study materials as part of the service. The adjudicating authority had proceeded mainly on the basis of an initial accounting consolidation in the balance sheet, without properly appreciating the documentary evidence.

Conclusion: The value of books and study materials could not be clubbed with the taxable value of commercial training or coaching service, and the demand on that basis was unsustainable. The issue was decided in favour of the assessee.

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