TaxTMI 
TaxTMI 
TaxTMI 
2008 (12) TMI 82
X X X X Extracts X X X X
X X X X Extracts X X X X
....mon issue is involved in these appeals and therefore, all are being taken up together for disposal. 2. The issue involved in these appeals is whether the Service Tax is payable/leviable on the amount of advance i.e. lumpsum payment received prior to 1.7.2003, (the date when Service Tax was levied on "Commercial training or Coaching Centre), when the service was actually rendered after 1.7.03. 3. The relevant facts of the case, in brief, are that the appellants are engaged in providing coaching service. On 01.7.2003, Service Tax was introduced on "Commercial Training or Coaching Centre". The appellants were registered with Central Excise department. It was found that the appellants collected the fees on the basis of the contracts, prior to 01.7.2003, when services were rendered from 01.7.2003. Show cause notices were issued proposing demand of tax on the value of taxable service received prior to 01.7.2003 and services were rendered after 01.7.2003. The adjudicating authority confirmed the demand of tax along with interest in all the cases and in Appeal No. ST/723/07 and ST/168/06, penalty was imposed of equal amount of tax. 4. The submission of the learned Advocate on behalf of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r to 1.7.03. She drew the attention of the Bench the various provisions of Finance Act and its Rules. She also filed Written Notes of argument with copy of case laws. 6. Heard both sides and perused the records. 7. For the purpose of proper appreciation of the case, the relevant provisions of the Finance Act, 1994 and its Rules, as it stood during the relevant period are reproduced below:- FINANCE ACT, 1994 FROM 1.7.2003 ONWARDS Section 65. Definition. - In this Chapter, unless the context otherwise requires, - XXX XXX XX (105) "taxable service" means any service provided, - (ZZC) to any person, by a commercial training or coaching centre in relation to commercial training or coaching; Charge of Service Tax. 66.(1) There shall be levied a tax (hereinafter referred to as the service tax) at the rate of eight percent of the value of the taxable services referred to in sub-clause, of clause (105) of section 65 and collected in such ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; XXX XXX (ZZC) to any person by a "Commercial training or Coaching centre" in relation to commercial training or coaching. 8. There is no dispute that from 1.7.2003 the appellants are liable to pay tax for rendering service of "commercial training or coaching centre." The main contention of the learned Advocate is that the appellants collected the amount prior to 1.7.2003 and, therefore, they are not liable to pay service tax on the services rendered by them after 1.7.2003. We are unable to accept the contention of the appellants. It is to be noted that service tax is a value added tax. Excise duty is a tax on value addition on goods, service tax is a tax on value addition by rendering services. So, the provision of Service tax should be read in this context. Section 66 is the charging section. Section 66 provides that the tax shall be levied and collected in such manner as may be prescribed. In terms of Clause (86) of Section 65, "prescribed" means prescribed by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; The learned Advocate submits that contract entered and executed prior to 1.l7.2003 and the fee is not refundable/transferable in any circumstance, the appellants agreed to provide coaching service prior to 1.7.2003. We find that the learned Jt. CDR rightly pointed out that Sovereign levy will not depend on the individual contracts to effectuate it. Levy of tax on 1.7.2003 has no nexus with contract of the appellants with their clients. In other words, the main test is that the appellant rendered the service after 1.7.2003 and they are liable to pay tax irrespective of fact collection taxable value was prior to 1.7.2003. The learned Advocate relied upon the case of Reliance Industries Ltd. (supra), wherein it has been held that when the service tax is introduced for the first time on any service, in respect of services already rendered on dates prior to introduction of service tax, even if payments are received on a subsequent date, no tax shall be liable. In fact, this proposition is in favour of the Revenue, as in the present case service tax is introduced for the first time on any service, in respect of amounts already collected on the date prior to introduction of service ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heir Workmen, AIR 1960 SC 12) (11) An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit." In view of the above discussions, we find that subsequent amendment of provisions would not change the dimension of the appellant's case. (iii) The contention of the learned Advocate is that only from 9.7.2004 by insertion of Explanation to Rule 6(1), it is provided for bifurcation of value. We have already discussed that levy and payment of tax are provided in the Act itself. So, the machinery provisions as provided in Rule 6 cannot defeat the object of the Act. In addition to that, Rule 6(1) as it stood during the relevant period provides for payment of tax on the value of taxable service received during any calendar month/quarter. In the present case, the value of taxable service was received prior to that period, which is mere incidental to Rule. ....