The Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the activity of sharing CAT score by IIM with the non-IIM institution does not fall under the service category of ‘Mailing List Compilation and Mailing Service’ and no service tax is payable.
The bench of P.A. Augustian (Judicial Member) and Pullela Nageswara Rao, Member (Technical) has observed that the appellant, IIM does not compile any information for the non-IIM institutions, the appellant only shares the CAT score obtained by the candidate in the examination conducted by them and only shares this information available with them and they do not compile any information from any other source.
Table of Contents
Background
The appellant, M/s. Indian Institute of Management (IIM) Kozhikode, is an autonomous institution under the administrative control of Ministry of Human Resource Development, Government of India engaged in imparting Management Education.
The appellant during the relevant period was registered under the service categories of ‘Scientific and Technical Consultancy Service’, ‘Management Consultancy Service’, and ‘Manpower Recruitment Agency Service’.
The IIM’s conduct Common Admission Test for admitting candidates to the Post Graduate Management Programme in its institutes. The CAT scores of the candidate apart from the use by IIM’s themselves will be shared with other institutions based on specific agreements entered into with the non-IIM institutions.
The non-IIM institutions submit to the IIM like the appellant, list of candidates, whose CAT scores are required for the purpose of admission to their institutions. The IIM charges a fee prescribed in the agreement for sharing of the CAT scores to non-IIM institutions.
The non-IIM institutions are required to pay annual flat fee Rs. 75,000 and a processing fee of Rs. 100/- per candidate for obtaining the CAT score.
A show-cause notice was issued to the appellant seeking to classify the sharing of CAT score under the service category of ‘Mailing List Compilation and Mailing Service’ falling under the taxable service under Section 65(105)(zzzg) of the Finance Act, 1994. 65(105)(zzzg) reads as; to any person, by another person, in relation to ‘Mailing List Compilation and Mailing’.
The show-cause notice was issued for the period 16.06.2005 to 31.03.2008. The Commissioner adjudicated the matter and confirmed the duty under section 73(2) along with interest under section 75 and imposed penalty under Section 77 and equivalent penalty under Section 78 of the Finance Act, 1994.
Arguments
The IIM contended that with respect to ‘Mailing List Compilation and Mailing Service’, the essential attribute is that there must be a compiling and providing of the list of names, addresses and other information from any source. Therefore, as per the definition it involves a positive activity of compilation of information and then providing that information to the client.
The IIM argued that the database maintained by the appellant has complete information of the candidate such as name, address, registration number and the scores are stored and while sharing the CAT score to non-IIM institutions, the name, address etc. are also shared. The confirmation of demand of service tax is unsustainable as the ‘mailing list compilation and mailing service’ contemplate compilation of data.
Issue Raised
The issue raised was whether the sharing of the CAT score by the appellant-IIM, Kozhikode with the non-IIM institutions for admission of candidates in their institutions, falls under the category of taxable service ‘Mailing List Compilation and Mailing Service’.
Conclusion
“We find that they do not provide any services of sending documents, materials, information or any other goods by addressing, stuffing, sealing, metering or mailing the envelope or packet for or on behalf of the non-IIM institutions, therefore they are not a mailing company despatching the goods to the customers,” the tribunal while allowing the appeal said.
Read More: SSI EXEMPTION BENEFIT AVAILABLE TO FACTORY IS LOCATED IN RURAL AREA: CESTAT
FAQs
Is Service Tax applicable On Sharing CAT Score By IIM With Non-IIM Institution?
The Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the case of IIM Versus Commissioner of Central Excise, Customs & Service Tax held that the activity of sharing CAT score by IIM with the non-IIM institution does not fall under the service category of ‘Mailing List Compilation and Mailing Service’ and no service tax is payable.
Case Details
Case Title: IIM Versus Commissioner of Central Excise, Customs & Service Tax
Case No.: Service Tax Appeal No. 184 of 2010
Date: 04.10.2024
Counsel For Appellant: Kuryan Thomas
Counsel For Respondent: Rajiv Kumar Agrawal
