2015 (5) TMI 1012 - AT - Service Tax

Demand of Service tax - PGDBA course - Held that Since the service tax liability on the PGDBA course conducted by M/s. Sinhgad Institute of Management and M/s. Sinhgad Institute of Business Administration and Research is not disputed by the assessee, the demands raised against such course along with interest is raised. Classification under Commercial Training or Coaching Centre - MBA (Residential) Course of Tilak Maharashtra Vidyapeeth (deemed University) - Held that as the appellant produced the statement of marks as well as provisional passing certificate issued by Tilak Maharashtra Vidyapeeth and University of Pune mentioning the name of the appellant-assessee as Institute/College from where the student appeared for the examination, it cannot be doubted as to the courses conducted by the appellant-assessee are recognized by law for time being in force. Therefore, appellant do not comes under the definition of Commercial Training or Coaching Centre and service tax cannot be demanded. As the entire service tax and interest has been discharged by the appellant-assessee before the issue of show cause notice and they could have entertained a bona fide belief that having recognized by various Universities for all courses, PGDBA may also fall under the same category,the non-discharge of service tax liability seems to be under bona fide belief. Therefore, by invoking the provision of Section 80 the penalty imposed is set aside. - Decided against the revenue

Summary

Issues Involved:

1. Whether the courses conducted by various constituent institutes of the appellant-assessee fall under the category of "Commercial Training or Coaching Services."
2. The validity of the demand and penalties imposed on the appellant-assessee for the service tax liability on the PGDBA course.
3. The correctness of dropping the demand for the MBA (Residential) course conducted by Tilak Maharashtra Vidyapeeth (deemed University).
4. The applicability of penalties under Section 76 of the Finance Act, 1994.

Detailed Analysis:

Issue 1: Classification of Courses under "Commercial Training or Coaching Services"

The central issue was whether the courses conducted by the appellant-assessee's institutes fell under "Commercial Training or Coaching Services" as defined under Sections 65(26) and 65(27) of the Finance Act, 1994. The adjudicating authority concluded that most courses were recognized by AICTE and the University of Pune, thus not falling under the taxable category. However, the PGDBA course was not recognized by any statutory authority, making it liable for service tax.

Issue 2: Demand and Penalties for PGDBA Course

The appellant-assessee admitted the service tax liability for the PGDBA course and had paid the entire demand along with interest before the issuance of the show cause notice. The appellant-assessee contested the penalties imposed by the adjudicating authority, arguing that the non-discharge of service tax was under a bona fide belief, given their other courses were recognized. The Tribunal confirmed the service tax demand but set aside the penalties, invoking Section 80 of the Finance Act, 1994, acknowledging the bona fide belief of the appellant-assessee.

Issue 3: Dropping of Demand for MBA (Residential) Course

The Revenue appealed against the dropping of the demand for the MBA (Residential) course. The Tribunal examined the definition of "Commercial Training or Coaching Services" and found that the courses conducted by the appellant-assessee were recognized by statutory bodies like AICTE and universities. The adjudicating authority's findings, supported by documentary evidence like mark sheets and certificates issued by the University of Pune and Tilak Maharashtra Vidyapeeth, were upheld, confirming that the courses were recognized by law and thus not taxable.

Issue 4: Applicability of Penalties under Section 76

The Revenue sought penalties under Section 76 for the confirmed service tax liability. However, the Tribunal found no merit in the Revenue's appeal, as the appellant-assessee had already paid the service tax and interest before the show cause notice, and the non-discharge of liability was due to a bona fide belief. The Tribunal rejected the Revenue's appeal for penalties under Section 76.

Conclusion:

The Tribunal upheld the adjudicating authority's decision regarding the recognition of courses by statutory bodies, confirming that such courses do not fall under "Commercial Training or Coaching Services." The service tax demand for the PGDBA course was confirmed, but penalties were set aside due to the bona fide belief of the appellant-assessee. The Revenue's appeal against the dropping of the demand for the MBA (Residential) course and the imposition of penalties under Section 76 was rejected. The appellant-assessee's cross-objection was also disposed of.