- (1.)The above Civil Miscellaneous Appeals are filed against the order dated 21-3-2014 made in Final Order Nos. 40197, 40198 and 40199 of 2014 and the order dated 28-8-2013 in Miscellaneous Modify Order Nos. 42176, 42179 and 42182 of 2013 on the file of the Customs, Excise and Service Tax Appellate Tribunal, Chennai raising the following substantial questions of law:
"C.M.A. Nos. 2904 to 2906 of 2014:

1. Whether the Tribunal was right in dismissing the appeal of the appellant by its order dated 21-3-2014 on the sole ground of noncompliance of the modified stay order dated 28-8-2013 without considering that an appeal against the said order is pending consideration before this Hon'ble Court in CMA Nos. 516 to 518 of 2014?

2. Whether the Tribunal was right in passing the impugned order dismissing the appeal of the appellant without considering the merits of the appeal, particularly when the Tribunal itself had admitted vide its stay order dated 27-5-2013 to examine the eligibility of the appellant towards 50% of the course fee collected which is actually towards the cost of course material sold to the trainees at the time of final hearing of the appeal?

3. Whether the Tribunal was right in passing the impugned order dismissing the appeal of the appellant without considering the merits of the appeal, particularly when the Tribunal itself had admitted vide its Mis. Modify order dated 28-8-2013 that the application for raising additional grounds will be considered for further detailed argument at the time of disposal of appeal?

4. Whether the Tribunal was right in not considering the decisions of the co-ordinate Benches of the Tribunal in identical matters holding the issue in favour of the appellant herein inspite of the said decision having been specifically brought to its notice?"

C.M.A. Nos. 514 to 516 of 2014:

1. Whether the Tribunal was correct in observing that it will not be proper for it to make any modification of the stay order in view of the existence of the order of the Hon'ble Bombay High Court in the case of Baron International Ltd. v. UOI, 2004 163 ELT 150 overlooking the subsequent judgment of the very same court in the case of Maina Khema v. UOI, 2004 170 ELT 3 holding that the said judgment though held that tribunal cannot exercise review jurisdiction, had jurisdiction to modify its orders within the permissible limits and parameters laid down under law?

2. Whether the Tribunal was correct in not following the decision of the coordinate Bench in the case of Rayudu Vision Media Ltd. v. CEX, Hyderabad, 2013 31 STR 501 involving identical issue, by not following the ratio of the Hon'ble Supreme Court in the case of Gammon India Ltd v. CC, Mumbai, 2011 269 ELT 289.

3. Whether the Tribunal is correct in holding that the testing of software is primarily connected with computer development software and therefore would stand excluded from the relevant clause of impugned Notification No. 24/2004-S.T. dated 10-9-2004 as amended by Notification No. 19/2005-S.T. dated 7-6-2005, even while not disputing that the training in testing of software enables the trainee to seek employment and therefore would be more appropriately covered within the meaning of vocational training institute as appended to the said notification?"

The brief facts are as follows:

The appellant is engaged in conducting courses on Software Testing for various students and other clients and is registered with the Service Tax Commissionerate, Chennai as 'Commercial Training and Coaching Service'. During audit of the accounts carried out by the Officers of the Internal Audit Wing, it was found that the assessee had not discharged service tax on the gross amount received. On a detailed enquiry and verification, the assessee informed that they were paying service tax only on the 50% of the gross amount representing the training fees and the remaining 50% amount represents the sale value of the course material. The Department was of the view that the course materials were never been sold to any students but given to the trainees only after their enrolment for a particular course. The Department was also of the view that course materials were neither priced at any fixed rate nor available in open market. Therefore, the Department held that the course materials provided by the assessee for commercial training would form part of the taxable value and chargeable to service tax. Accordingly, the Department demanded service tax of Rs. 1,12,26,207/- on the balance 50% of the gross amount received from the students for the period April, 2005 to November, 2008. Apart from this, there was service tax due since April 2007. Hence, in all, the Department demanded service tax at Rs. 1,21,98,372/-. A show cause notice was issued to the assessee vide SCN No. 132/2009 dated 9-4-2009 stating that as to why service tax along with interest and penalty should not be levied. It appears that some amount has been paid pending enquiry.

(2.)The assessee filed a written submission to the show cause notice. The Commissioner of Service Tax considered the same and held that the perusal of the receipts issued by the assessee to the students showed that the whole amount received by them represents course fee and not for sale of goods. The Commissioner, therefore, held that the course materials are not priced, but only for the purpose of payment of service tax, the assessee deliberately adopted 50% of the course fee as charges for course material. Therefore, he held against the assessee upholding the demand of service tax. The relevant portion of the order of the Commissioner reads as follows:
"i. In terms of the provisions of Finance Act, 1994, I order confirming the demand of service tax of Rs. 1,21,98,372/- (Rupees one crore twenty one lakh ninety eight thousand three hundred and seventy two only) payable by M/s. STC Technologies Pvt. Ltd. during the period from April, 2005 to November, 2008 under proviso to Section 73(1) of the Finance Act, 1994 read with Section 73(2) of the Act.

ii. In terms of the provisions of the Finance Act, 1994, I order confirming the demand of service tax of Rs. 15,41,102/- (Rupees fifteen lakh forty one thousand one hundred and two only) payable by M/s. STC Technologies Pvt. Ltd. during the period from December, 2008 to March, 2010 under Section 73(1) of Finance Act, 1994 read with Section 73(2) of the Act.

iii. I order that M/s. STC Technologies Pvt. Ltd shall pay interest on the amounts demanded under SI. Nos.(i) and (ii) above in terms of Section 75 of the Finance Act, 1994 from the due date for payment of service tax till the date of actual payment.

iv. I impose penalty of Rs. 1,21,98,372/- (Rupees one crore twenty one lakh ninety eight thousand three hundred and seventy two only) under Section 78 of the Finance Act, 1994 on M/s. STC Technologies Pvt. Ltd. in respect of SCN No. 132/2009 dated 9-4-2009. This penalty shall however be reduced to 25% of the service tax determined, if only the service tax and interest determined is paid along with reduced penalty within 30 days from the date of receipt of this order in terms of proviso to Section 78 of the Finance Act, 1994. I do not impose penalty under Section 76 as the penalty imposed under Section 78 would meet the ends of justice.

v. I impose a penalty of Rs. 200/- (Rupees two hundred only) for every day at the rate of 2% of tax determined per month, whichever is higher up-to 7-4-2011 and Rs. 100/- (Rupees one hundred only) for every day or at 1% of the tax determined per month, whichever is higher with effect from 8-4-2011, starting with the first day after the due date till the date of actual payment under Section 76 of the Finance Act, 1994 in respect of the demands made under SCN Nos. 208/2010 dated 16-4-2010 and SCN No. 15/2011 dated 20-4-2011. However, the total amount penalty payable under Section 76 shall not exceed the service tax payable.

vi. I impose a penalty of Rs. 5000/- (Rupees five thousand only) under Section 77 of the Finance Act, 1994."

(3.)Appeals were preferred by the assessee for the different periods as against the order of the Commissioner of Service Tax before the Tribunal along with applications for an order of stay. By order dated 27-5-2013, in Miscellaneous Order Nos. 41372 and 41374 of 2013, the Tribunal came to the conclusion that there was no prima facie case for grant of waiver of pre-deposit. However, considering the plea of the appellant, directed the appellant to deposit a sum of Rs. 40.00 lakhs within a period of six weeks. For better clarity, the relevant portion of the order of the Tribunal reads as follows:
"7. Opposing the prayer, the Ld. AR. for Revenue submits that the value of the study materials has been arbitrarily fixed just to avoid payment of appropriate service tax. He points out that the material in question is not sold independently of the training service and is of no value independent of the service. He submits the cases where the Tribunal allowed exemption there was evidence that the books were sold independently also and the cost of the books was not artificially inflated to reduce the cost of the taxable service. Further, he invites our attention to para 6.4 of the order incorporating images of sample receipt and invoice which shows that the full amount is received from trainees as "course fee" but the amount is artificially split. He relies on the decision of the Tribunal in the case of Soni Classes v. CCER, 2013 30 STR 92

8. Considered submissions on both sides. The applicant has not been able to demonstrate that 50% of the course fees collected is actually cost of course of the material sold. Further, the material appears to be a type which has no separate value when dissociated with the service provided which matter can be examined during the hearing of the appeal. At this stage, we do not consider this a fit case for full wavier of pre-deposit for admission of appeal. So, we order the applicant to make a further deposit of Rs. 40,00,000/- (Rupees Forty Lakhs only) within 6 weeks from the date of this order. Subject to such pre-deposit, pre-deposit of balance dues arising from the impugned order is waived and its collection stayed during the pendency of the appeal".