COMMISSIONER OF SERVICE TAX Vs. DIOTECH INDIA LTD.

JUDGEMENT

(1.) HEARD the learned Deputy Commissioner (AR) for the Revenue, as none appeared on behalf of the appellant in spite of notice. The notice issued to the respondent received back with postal remarks that the respondent has moved from the given address. The Revenue filed this appeal against the impugned order passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) allowed the appeal filed by the respondent on merits as well as on time bar.

(2.) BRIEF facts of the case are that the respondents are registered under the Service Tax as provider of "On -line information and data base access or retrieval or both" for providing website and e -learning service in electronic form through computer network and also carries out trading activity in the consumer goods and branded products. During the course of verification of records of the respondents, it was observed that the registration fee collected by the respondent was not declared in the ST -3 returns filed by them and that the registration fee formed part of the correct value of the taxable service. Therefore a show cause notice dated 10 -6 -2004 for the period July, 2001 to July, 2003 was issued to the respondent demanding Service Tax amount of Rs. 32,00,857/ - interest and also for imposition of penalties on the ground that the registration fees collected was not declared in the ST -3 returns filed by the respondent. The registration fee formed part of correct value of the taxable service in terms of the provisions of Section 67 of the Finance Act, 1994. The adjudicating authority confirmed the demand with interest and also imposed penalties.

(3.) THE contention of the Revenue is that the registration fee collected by the respondent is part of the value of taxable service provided in respect of the activity of online information and data base access or retrieval or both on which the respondent is liable to pay Service Tax. The amount of Rs. 200/ - received from their clients as registration fee in fact is not refundable and is to be adjusted in the first purchase of the goods by the clients and if no purchase is made the registration fee is not to be refunded as such. As the registration fee is not an amount refundable, the said amount is to be added to the value of taxable service provided by the respondent.