2014 (8) TMI 53 - AT - Service Tax

Management or Business Consultancy Services - appellant was just assisting the conduct of the examinations of the universities and NASSCOM, thereby giving technical assistance to the universities and NASSCOM - Scope of Section 65(65) of the Finance Act, 1994 - Held that - prima facie, no element of consultancy or technical assistance was involved. As it is not in dispute that the service recipient viz. universities are educational institutions offering various academic courses with specific curricula and specific syllabi and conducting examinations for the students on completion of such courses and issuing certificates or degrees to the successful students, the activities undertaken by the appellant were prima facie activities undertaken in aid of education institutions. For these reasons, prima facie, we have found a strong case for the appellant against the demand raised to the extent of ₹ 1.94 crores ₹ 82 lakhs. - full stay granted. However, appellant has not made out such a case against the demand of ₹ 20 lakhs which was quantified on the gross amount received by the appellant from the NASSCOM. There is no evidence on record to indicate that NASSCOM is an educational institution - Pattern of question papers was given by the NASSCOM but the questions were prepared by the appellant. In this process, there appears to be an element of technical assistance of the appellant to NASSCOM - stay granted partly.

Issues Involved:
1. Appellant seeks waiver and stay on dues adjudged as service tax and education cess.
2. Whether the activities undertaken by the appellant qualify as services of "Management and Business Consultant" under the Finance Act, 1994.
3. Prima facie liability of the appellant towards service tax and education cess demands.

Analysis:

Issue 1: Appellant seeks waiver and stay on dues adjudged as service tax and education cess.
The appellant filed an application seeking waiver and stay on the dues adjudged against them, including a demand of Rs. 3,11,31,213/- for service tax and education cess for the period from December 2007 to July 2009. The demands were related to services provided to Sikkim-Manipal University, Manipal University/Manipal Academy of Higher Education, and the National Association of Software and Service Companies (NASSCOM). The appellant conducted examinations for the universities and skill assessment tests for NASSCOM. The appellant contested the findings of the adjudicating authority, claiming that the activities undertaken did not fall under the definition of "Management and Business Consultant" and that the services rendered to the universities should be exempt from the levy. The appellant also raised the issue of limitation and financial hardships. The Tribunal examined the submissions and found a prima facie case against a portion of the demand, requiring the appellant to pre-deposit a specific amount within a stipulated time.

Issue 2: Whether the activities undertaken by the appellant qualify as services of "Management and Business Consultant" under the Finance Act, 1994.
The key issue revolved around whether the activities undertaken by the appellant with the universities and NASSCOM qualified as services of "Management and Business Consultant" as defined under Section 65(65) of the Finance Act, 1994. The definition included providing services in connection with the management of any organization or business, rendering advice, consultancy, or technical assistance in various areas of management. The Tribunal observed that the appellant's activities in conducting examinations for the universities primarily supported educational institutions without involving consultancy or technical assistance. Therefore, a strong case was found against a significant portion of the demand related to services provided to the universities. However, concerning the services provided to NASSCOM, where technical assistance was evident, the appellant was held liable to pre-deposit the entire amount of service tax and education cess demanded.

Issue 3: Prima facie liability of the appellant towards service tax and education cess demands.
The Tribunal found a strong case against the demand raised for services provided to the universities, exempting the appellant from a significant portion of the demand. However, concerning the services provided to NASSCOM, where technical assistance was involved, the appellant was required to pre-deposit the entire amount demanded. The Tribunal granted waiver of pre-deposit and stay of recovery for penalties imposed on the appellant and the remaining amount of service tax and education cess, subject to due compliance with the pre-deposit requirement within the specified timeline.

This detailed analysis of the judgment highlights the key issues, legal interpretations, and the Tribunal's decision regarding the appellant's application for waiver and stay on the dues adjudged against them.

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