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YK Information Systems Pvt Ltd Versus Commissioner of Central Excise, New Delhi

2015 (7) TMI 552 - CESTAT NEW DELHI

Commercial coaching and training service - discharge of service tax only on 80% - Royalty received - Held that:- The authorized representative of Aptech Ltd. is required under the terms of the franchise agreement to disburse the course fee credited into the escrow account between Aptech Ltd. and the appellant, in the proportion agreed to between the parties under the said agreement. Accordingly, the appellant received 80% of the course fee and 20% by Aptech Ltd., as its royalty under the franchi .....

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der - Held that:- Decision in the case of mPortal India Wireless Solutions P. Ltd, vs. C.S.T., Bangalore reported as [2011 (9) TMI 450 - KARNATAKA HIGH COURT] followed - registration is not mandatory for the availment of credit. On the basis of this binding authority, the concurrent denial by the authorities below of credit of ₹ 2000/- is also unsustainable and requires to be set aside. - Decided in favour of assessee. - Service Tax Appeal No. 1724/2011 - Final Order No. 51744/2015 - Dated .....

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remittance of tax and ordered recovery thereof along with interest. He also confirmed a demand of ₹ 3,408/- on the ground of wrong availment of cenvat credit and directed its recovery along with interest. The primary authority confirmed the levy of interest of ₹ 2,088/- for delayed remittance of service tax and appropriated an amount of ₹ 2,087/- which the appellant/assessee had already remitted towards this interest component. Apart from this, the primary authority imposed pen .....

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rogrammes for providing training in computer based information technology comprising software modules developed by Aptech under the brand name "Arena Multimedia". To the extent relevant and material for resolution of this lis, the franchise agreement provides that Aptech shall be entitled to royalty equivalent to 20% of the course fee which means fee for training provided by the appellant on behalf of APTECH under the terms of the agreement. Section 4.2 of the franchise agreement stipu .....

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the designated account in the manner provided in the said Section. Accordingly, 20% of the amount flowing into the designated account (from the course fee collected by the appellant from students who were provided instruction under the franchise agreement) shall be remitted to Aptech Ltd. and 80% shall be paid by the authorized representative of Aptech to the appellant. 4. The appellant remitted service tax on the consideration received by it from escrow account aforementioned at appropriate rat .....

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whole of the course fee received from students. According to Revenue the consideration received by the appellant for providing the taxable services is not 80% of the amount received by it from the escrow account but 100% collected by the appellant and deposited into the escrow account. This is the only dispute presented before me. 6. The authorities below concurrently ruled that since the appellant had provided the taxable service i.e. commercial coaching and training, the entirety fees remitted .....

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bious arrangement or an artifice specially calibrated to defeat the appellant's liability to tax, it is clear from Sections 4.2 and 4.3 of the franchise agreement dated 14.1.2005, that commercial coaching and training, the taxable service, is provided by a unit of M/s Aptech Ltd., an independent, corporate entity but under the administration of the appellant which physically provides the service in terms of the franchise agreement. Under the terms of the agreement, the course fee is collecte .....

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. 8. In the factual scenario as is clear from the transactional instrument namely, the franchise agreement dated 14.1.2005 it is clear that the consideration received by the appellant for rendition of commercial training and coaching service is only 80% , on which the appellant remitted the service tax due after filing returns in time and without delay. 9. In identical factual circumstances of another entity, similarly situate as the appellant herein and providing commercial training and coachin .....

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