2019 (10) TMI 1328 - AT - Service Tax

Classification of services - Support Services of Business and Commerce or not - imparting education to the students for degree courses conducted by University under the Distance Education Programme approved by the University Grants Commission - period April, 2008 to March, 2012 - HELD THAT - The Sikkim Manipal University is a recognised university under UGC and is certainly not doing any business activity but providing education services and these facts are not in dispute. The similar services carried on the appellant, being identical services to that of the university, cannot by any stretch of imagination be classified under support services of business when the service provided by the University is not a business activity itself - the classification under the head Support Services of Business and Commerce is per se incorrect as education services can neither be treated as a Business nor as Commerce and therefore, the impugned demand is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against demand of service tax for the period 2008-09 to 2011-12.
- Classification of services provided by an Authorised Learning Centre under the category of Support Services of Business and Commerce.
- Applicability of service tax on infrastructural support services provided to a university under the distance education programme.

Analysis:
1. The appeal was filed against the demand of service tax confirmed by the Ld. Jt. Commissioner and upheld by the Ld. Commissioner (Appeals) for the period 2008-09 to 2011-12.
2. The appellant, an Authorised Learning Centre of a recognized university, was providing education services under the Distance Education Programme approved by the University Grants Commission.
3. The appellant argued that the services provided were primarily education services and were essential for the courses leading to degrees recognized by law, and thus, should not be classified as Support Services of Business and Commerce.
4. The appellant relied on judicial decisions to support the argument that once a service is excluded from a specific taxing entry, it cannot be classified under any other service category for levying service tax.
5. The Revenue contended that the infrastructural support services provided by the appellant to the university justified the demand under the category of Support Services for Business and Commerce.
6. The Tribunal observed that the university was not engaged in business activities but in providing education services, which were also provided by the appellant, making the classification under Support Services of Business and Commerce incorrect.
7. The Tribunal agreed with the appellant's argument that services excluded from specific taxing entries cannot be taxed under other categories, citing relevant judicial precedents.
8. Consequently, the Tribunal set aside the demand of service tax, ruling in favor of the appellant and allowing the appeal with consequential relief as per law.