M/S. Sunnycom Training Institute vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. PIII/VM/220/09 dated 19.10.2009 passed by the Commissioner of Central Excise (Appeals), Pune-III))

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S.Pruthi, Member (Technical)

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1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : of the Order?

4. Whether Order is to be circulated to the Departmental : authorities?

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M/s. Sunnycom Training Institute :

Appellant

VS

Commissioner of Central Excise, Pune-III :

Respondent

Appearance

Ms. Kranti Rathis, Advocate for Appellant

Shri S.V. Nair, Assistant Commissioner (A.R) for respondent

CORAM:

Mr. M.V. Ravindran, Member (Judicial) Mr. P.S.Pruthi, Member (Technical)

Date of hearing : 23/04/2015 Date of decision : 23/04/2015

ORDER NO.

Per : M.V. Ravindran

This appeal is directed against Order-in-Appeal No. PIII/VM/220/09 dated 19.10.2009.

2. Heard both sides and perused the records.

3. The issue involved in this case is regarding the service tax liability of the appellant on an amount, which according to the department is an amount which has escaped service tax liability.

4. The facts in brief are the appellant is a franchisee of M/s. Aptech Ltd. and are engaged in imparting training in computer-based multimedia and animation under the brand name Arena Multimedia in terms of an agreement entered into with M/s. Aptech Ltd. In terms of the said agreement, appellant received` 80% of the amount of the fees paid by students directly to M/s. Aptech Ltd. and the appellant discharges the service tax liability on the said amount received by them to M/s. Aptech Ltd. It is also to be noted that the students make the payment in the name of M/s. Aptech Ltd.

5. After hearing both sides, we find that identical issue came up before this Bench in the case of Kunal IT Services Pvt. Ltd. in Appeal No. ST/356/2010 and same was disposed of by Final Order No. A/836/15/STB dt. 12.3.2015.

6. We find that the issue is no more res integra as I was one of the Member in the Final Order dt. 12.5.2015 wherein we have recorded as under:

On careful consideration of submissions made by both sides, we find that the issue is whether appellant is required to discharge service tax liability on an amount which represents 20% of the gross amount charged as fees from the students and this amount is retained by M/s. Aptech Ltd.

Undisputedly, the appellant are discharging service tax liability on the amount which is parted to them by M/s. Aptech Ltd. It is also undisputed that the appellant is the service provider and the students are the service recipient.

We find that there is no dispute as to the fact that the students issue the cheques for the payment of fees in the name of M/s. Aptech Ltd. It is on record that appellant is not receiving any amount from the students directly. The provisions of Section 67 of the Finance Act, 1994 envisage for considering the gross value for discharge of service tax liability. The said section specifically provides that the gross value which is charged for the services has to be considered for payment of service tax liability. In the case in hand, the amount received by the appellant for the provision of services under the category of Commercial Coaching or Training Services is the 80% of the amount paid by the students, as students make 100% of the payment directly in the name of M/s. Aptech Ltd. If that be so, appellant has correctly discharged the service tax liability on an amount received by him for the services rendered under the category of Commercial Coaching or Training Services.

In view of the foregoing and in the facts and circumstances of this case, we find that the impugned orders are unsustainable and liable to be set aside and we do so. Impugned order is set aside and the appeal is allowed with consequential relief, if any.

7. The above said ratio is squarely covered the issue before us as the facts are identical. Accordingly, we find that the impugned order is incorrect and liable to be set aside. The impugned order is set aside and the appeal is allowed.

(Pronounced & Dictated in court)

(P.S.Pruthi) Member (Technical)

(M.V. Ravindran) Member (Judicial)

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