Page 92 - GSTL_16 April 2020_Vol 35_Part 3

306 GST LAW TIMES [ Vol. 35
Year Value as shown in Value as Taxable Value Difference in
ST-3 returns shown in taxable value
(in Rs.) Balance sheet
2004-05 898549 3494750 3179279.49 2272730
2005-06 511000 4652650 422005.44 3711005
2006-07 652818 10141973 9035970.24 8743429

4. Thereafter they recorded the statements of Shri M. Gopala Reddy,
Managing Director of assessee firm and Shri Bhikshapathy, Chartered Account-
ant and questioned about the difference between the value of taxable services
shown in the returns and that shown in the balance sheet. Shri Bhikshapathy
confirmed that the amounts shown under the head ‘Course fee’ in their records
was higher and it represented (a) the application fee, (b) registration fee, (c) sale
of study materials, and (d) examination fee and coaching fee. When asked if they
were discharging service tax on the entire amount, he explained that they have
not paid tax on amounts received from the students towards supply of materials
on the ground that the same are exempted and therefore they have not dis-
charged service tax on the full value. He also paid an amount of Rs. 4,99,999/-
during the investigation on 4-11-2008 towards service tax on the value not shown
in their returns and agreed to work out the differential service tax and pay the
same along with interest. Further examination of the records showed that the
explanation of the assessee that they claimed exemption for the value of study
materials appeared incorrect because they were raising a single invoice on the
students for the services rendered and the amount collected is a composite
amount for training and there is no separate cost of study materials or examina-
tion fee. It was further found that there is no price printed on the study materials
provided by the assessee. During the present proceedings, Learned Counsel for
the assessee showed us sample copies of the study materials and also agreed that
there is no separate price printed on the study material. A show cause notice was
issued to the assessee on 15-5-2009 demanding differential service tax along with
interest and proposing to impose penalties under Sec. 76, 77 & 78 of the Finance
Act, 1994. This demand was confirmed vide Order-in-Original No. 37/2009, dat-
ed 17-8-2009. On appeal by the assessee, the Commissioner (Appeals), vide Or-
der-in-Appeal No. 79/2009 (H-II) S.T., dated 27-11-2009, remanded the matter
back to the original authority with a direction to pass the order after following
principles of natural justice. In pursuance of this order, Order-in-Original No.
38/2010 (de novo) (S. Tax), dated 12-5-2010 was passed confirming the demand
along with interest and imposing penalties under Sec. 76, 77 & 78 of the Finance
Act, 1994. Aggrieved by this order, the assessee appealed before the first appel-
late authority who, vide the impugned order, modified the order of the lower
authority to the extent of allowing benefits of exemption Notification 24/2004-
S.T., dated 10-9-2004 read with Notification 19/2005-S.T., dated 7-6-2005 for the
period 10-9-2004 to 15-6-2005. This is the order which is under challenge in the
present appeals.
5. After hearing both sides, we find that assessee has not discharged
the service tax on the entire amount collected by them from the students under
“Commercial Coaching and Training Services” claiming the following as ex-
empted therefrom. -
(1) Sale of books

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