2023 (4) TMI 261 - CESTAT NEW DELHI

Levy of penalty - Classification of services - coaching service - franchise service - business in imparting education and training in general spoken English, business English for corporate communication, professional English (i.e., English for Engineers and MBA, etc.), foreign languages, call centre grooming, voice and accent, presentation skills, interview skills, group discussion, preparation test and entrance exams, etc. - demand alongwith interest and penalty - HELD THAT:- Sub-Rule (5) of Rule 4 of the Service Tax Rules (supra) categorically state that if the registration certificate is not granted within a period of 7 days of receipt of application, then the said registration is deemed to have been granted. Once the registration was not granted even after the lapse of 7 days, it is seen that the assessee did not make a single attempt for more than a year to seek clarification. It is evident that the assessee in the meantime was collecting service tax from his students for the services being extended by them. So it is apparent that the assessee was very much aware that service tax was liable to be paid but they did not deposit the said amount so collected to the Government exchequer nor did they file their ST 3 returns.

Penalty under section 78 upheld by Commissioner (Appeals) is correct - Appeal dismissed.