DEWSOFT OVERSEAS PVT. LTD. Vs. CST

JUDGEMENT

(1.) THE Appellants provide Computer education via "online" and "Real time centres".

(2.) The "real time centres" are the traditional computer coaching centres, some of which are owned by the Appellants and the remaining are managed through franchisees, who represent the Appellants and run the coaching centres at various places in India on the basis of the concepts of business operation and know -how provided by the Appellants, on payment of certain fee to the Appellants. The main activity of the Appellants, however, is online computer education through the medium of internet i.e. through an interactive website. The main point of dispute is as to whether the activity of providing "online computer training" is classifiable as "commercial Training or Coaching" under Section 65(27) of the Finance Act, 1994 and on this basis exempt from service tax under Notification No. 9/2003 -ST dated 20/06/03, as claimed by the Appellant or this activity is classifiable under heading - "online information and data base access and/or retrieved service" defined Under Section 65(75) of the Finance Act, and chargeable to service tax accordingly. The other point of dispute is with regard to the real time training/coaching centres managed through franchisees and the same is whether the franchise fee being received by the Appellants from their franchisees is liable to service tax under "Franchise Service" as defined under Section 65(47) of the Finance Act, 1994.

(3.) WE have carefully considered the submissions from both the sides. The Appellants conduct what they call - "online computer courses" and besides this also operate "Real time centre for computer courses/training" and while some of such traditional coaching centres are operated by the Appellants themselves, others are operated by franchisees. The main points of dispute are -