SARASWATI SHIKSHA KENDRA Vs. CCE

JUDGEMENT

(1.) THIS appeal has come up for hearing on the point of waiver. In terms of the impugned order, the appellant is required to pay Service Tax of Rs. 3,99,362/ - and penalty @ Rs. 100/ - per day under Section 76 of the Finance Act, 1994.

(2.) ADMITTEDLY , the appellant is running a commercial training or coaching centre within the meaning of Clause (27) of Section 65 of the Finance Act and is, therefore, rendering a taxable service within the meaning of Sub -clause (zzc) of Clause (105) of Section 65. In fact, the appellant does not dispute the liability to pay Service Tax. The case of the appellant is that it is providing service under a franchise granted by Career Point Infosystems Ltd., Kota, with whom it shares the amount received from the students as fees etc. on 75:25 per cent basis. As the appellant is retaining only 75% of the amount collected from the students, it is not liable to pay Service Tax to the extent of the remaining 25% of the amount.

(3.) IT was then submitted that even if the appellant is held liable to pay 100% Service Tax, it is entitled to avail Cenvat Credit in terms of Rule 3 of the Cenvat Credit Rules, 2004. The said Rule, no doubt, provides that provider of a taxable service can take credit on tax paid on any input service received from the provider of output service, but in the absence of any evidence on the point, it is not possible to accept the contention. As a matter of fact, there is a definite finding in the order of the Commissioner to the effect that payment of 25% amount as ongoing royalty to Career Point Infosystems Ltd. is not an input service in relation to commercial training or coaching service rendered by the appellant.