By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Commercial training and coaching services – validity of CBEC Circular No. 59/8/2003-ST dated 20-06-2003 vis-a-vis Exemption Notification No.12/2003-ST dated 20-06-2003 – Held, circular is ultra vires.
Facts:
The Appellants provided “Commercial Training & Coaching Services” and composed and furnished course materials relevant to the coaching to its students. Relying upon Notification No.12/2003-ST dated 20-06-2003 granting exemption to the value of goods or materials sold, the Appellants separately raised an invoice of the materials sold and did not charge service tax on the same.
Relying on Circular No. 59/8/2003-ST dated 20-06- 2003 which stated that the Exemption Notification was applicable only where the value of the course material met the description of the standard textbooks which were priced, the department contended to levy tax along with interest and penalty on the said value of supply of materials.
Held:
Considering the circular to be misconceived, illegal and contrary to the statutory Exemption Notification dated 20-06-2003, the Hon. Tribunal stated that where the legislature had spoken in exercise of its statutory power exemption granted by the Central Government u/s. 93 of the Act, the CBEC had no manner of power, authority or jurisdiction to deflect the course of an enactment or the exemption granted. Grant of exemption from the liability to tax was a power exclusively authorised to the Central Government and no participatory role to the Board. In seeking to restrict the generality of the exemption granted by the Central Government, the CBEC transgressed into the domain of the Central Government which was clearly prohibited.
