Bansal Classes vs Commissioner of Central Excise and Service Tax

Heard on admission. This appeal is directed against the final order dated 13.9.2013 passed by the Customs, Excise & Service Tax Appellate Tribunal in Appeal No. ST/4030/2012-SM.

The appellant holder of service tax registration provides commercial training and coaching services to the students and is not entitled to confer any degree on them. It is, however, availing the Cenvat credit in respect service tax paid on various input services. Scrutiny of the records of appellant revealed that it had wrongly availed Cenvat credit amounting to Rs. 1,04,035/- during 01.08.2005 to 30.09.2008 on certain ineligible input services catering, photography, tent (mandap keeper), maintenance & repairs (motor vehicles), rent for hiring examination hall and travelling expenses. The Revenue was of the view that Cenvat credit was not admissible to the appellant as it did not cover under the definition of input services as provided in Rule 2(1) of Cenvat Credit Rules because these services are not used in or in relation to providing output services. The Department, therefore, issued show cause notice to the appellant and demanded service tax along with interest with proposed penalty. Show cause notice was decided against the appellant and the order-in-original was challenged before the Commissioner (Appeals) who vide order dated 21.09.2012 dismissed the same after modifying the penalty amount. Undeterred, the appellant filed appeal before the Appellate Tribunal which has been partly allowed by the impugned order.

The Appellate Tribunal, allowed the appeal to the extent that the appellant was eligible for Cenvat credit only in respect to service tax paid on hiring of examination hall on rent. The Tribunal has held that for catering, photography service, tents and motor vehicles, the appellant was not eligible for Cenvat credit.

As already mentioned, the appellant is essentially providing commercial training and coaching services to the students. It is not permitted to confer educational degrees on the students. The services of catering, photography and tents are used by the appellant to encourage the successful students in coaching. These services are used only after commercial training or coaching is over. The celebrations are organized by the appellant during the academic sessions to encourage the existing students and motivate new students. In these celebrations, catering, photography and tents are used by the appellant and these celebrations are held only when students pass commercial training or coaching classes. The appellant is paying service tax under the output service of commercial training or coaching. Once the students pass their coaching classes, the activities of catering, photography and tent services cannot be said to have been used to provide output service. Similarly, the appellant maintain and repair its motor vehicle during the course of the business and there is no material to show that maintenance and repairs have any nexus to commercial training or coaching. Likewise, the travelling expenses incurred by the appellant for the business tours cannot be related to provision for commercial training or coaching. We find ourselves in complete agreement with the view taken by the Tribunal against the appellant.

The learned counsel for the appellant states that the action taken by the respondent was beyond the period of limitation.

From the perusal of the impugned order we, however, find that this point was not argued before the Appellate Tribunal and, therefore, we do not intend to advert on it. The appeal has no merit and is, accordingly, dismissed.