2013 (3) TMI 380 - AT - Service Tax

Commercial Training or Coaching - Recognized Course - Service Tax applicability under Section 65(105)(zzc) - Classification of Services - Held that - The expression Commercial Training or Coaching Centre as defined under Section 65(27) means, institutes, which issue certificates recognized by the law are excluded from the definition of Commercial Training or Coaching Centre . Prima facie, we are of the view that this recognition of the degree by the IGNOU indicates that the degree awarded by the appellant s institute is recognized in India and in view of this, the appellant s institute would not be covered by the definition of Commercial Training or Coaching . we are of the view that the appellant have a strong prima facie case in their favour and the requirement of pre-deposit of service tax demand, interest and penalty for hearing of their appeal would cause undue hardship. - Stay granted in full.

Summary

Issues:
Classification of activity as "Commercial Training or Coaching" under Section 65(26) of the Finance Act, 1994.

Analysis:
The case involved an appeal by an Institute run by a Charitable Trust against a show cause notice for demand of service tax on the course B.Sc. (Hons.) in Business & Management studies offered by them. The dispute centered around whether the activity of organizing courses resulting in the award of this degree falls under the definition of "Commercial Training or Coaching" as per Sections 65(26) and 65(27) of the Finance Act, 1994.

The appellant argued that their degree is recognized by Indira Gandhi National Open University (IGNOU) for admission to post-graduation programs, indicating recognition under Indian law. They contended that since the degree is recognized in India, their institute should not be considered a "Commercial Training or Coaching Centre" and hence not taxable under Section 65(105)(zzc) of the Finance Act, 1994.

The Departmental Representative opposed the appellant's claim, stating that the degree awarded by the institute is not recognized in India and no evidence was provided to support the recognition of the degree by authorities like University Grant Commission or AICTE. The Department emphasized that the requirement of pre-deposit of duty demand, interest, and penalty should not be waived.

After considering the submissions, the Tribunal noted that the degree awarded by the appellant's institute is recognized by the University of Bradford, U.K., and by IGNOU for post-graduation admissions. The Tribunal observed that the recognition by IGNOU indicated that the degree is recognized in India, thus excluding the appellant's institute from the definition of "Commercial Training or Coaching Centre."

Consequently, the Tribunal found that the appellant had a strong prima facie case in their favor and that the requirement of pre-deposit of service tax demand, interest, and penalty for the appeal would cause undue hardship. Hence, the Tribunal waived the pre-deposit requirement and stayed the recovery of the tax demand, interest, and penalty until the appeal's disposal. The stay application was allowed, providing relief to the appellant pending the final decision on the appeal.