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2018 (3) TMI 1011 - AT - Service TaxInterpretation of statute - commercial training or coaching services - it was alleged that since the training courses conducted by IIPM do not result in award of any certificate/ Diploma/ Degree or any other educational qualification recognized by the law being in force, the activity will fall under the category of Section 65 (105) (zzc) of the Act and is a taxable service liable to payment of Service Tax - Held that - there is no scope to exclude Academic Courses , conducted by IIPM from the purview of Service tax levy. The exclusion provided in Section 65 (27) is available to any institute or establishments which issues any certificate or any educational qualification recognized by law for the time being in force. But it is an admitted position that the certificates and degrees awarded by IIPM and also by IMI, Europe do not enjoy the recognition from AICTE or UGC. These facts have been declared by IIPM in their prospectus and advertisements and such facts have been admitted by the Dean of IIPM in his statements before the investigating authorities - IIPM clearly falls under the definition of Commercial Training or Coaching Centre as defined in law Section 65 (27) and the services rendered by them are liable to Service Tax. Time limitation - whether extended period of time could be invoked in the present case for confirmation of Service Tax demand? - Held that - It is on record that IIPM neither took registration nor registered themselves with Department up to 22/07/2005. On the said day the registration was taken only at Bangalore even though IIPM has Institutes in many other places. They also did not pay any Service Tax or file ST-3 Returns even though the tax on Commercial Training or Coaching Centre was levied w.e.f. 01/07/2003 - Since they have failed to obtain registration or file returns or even intimate the Department of the activities undertaken, the Department is fully justified in issuing show cause notice to demand of Service Tax along with interest by invoking the extended period of time - extended period rightly invoked. Demand upheld - appeal allowed - decided in favor of Revenue.
Issues Involved:
1. Classification of IIPM's courses as "Commercial Training or Coaching" or "Academic Education". 2. Applicability of Service Tax on IIPM's courses. 3. Invocation of the extended period for Service Tax demand. 4. Penalties and interest on the Service Tax demand. Issue-Wise Detailed Analysis: 1. Classification of IIPM's Courses: The primary issue revolves around whether the courses offered by IIPM should be classified as "Commercial Training or Coaching" or "Academic Education". The Adjudicating Authority initially distinguished between the two, classifying some courses as academic and exempting them from Service Tax. However, the Tribunal concluded that IIPM's courses fall under "Commercial Training or Coaching" as defined in Sections 65(26) and 65(27) of the Finance Act, 1994. The Tribunal noted that the degrees and certificates awarded by IIPM were not recognized by AICTE or UGC, thus not qualifying for the statutory exclusion from Service Tax. 2. Applicability of Service Tax: The Tribunal held that IIPM's activities clearly fall under the definition of "Commercial Training or Coaching Centre" as per Section 65(27) of the Finance Act, 1994. The courses conducted by IIPM, including those leading to degrees from IMI, Europe, are subject to Service Tax because they do not result in recognized educational qualifications. The Tribunal referenced the Larger Bench decision in the Great Lakes Institute of Management Ltd., which emphasized that any training or coaching imparted for consideration falls within the taxable service unless specifically excluded by law. 3. Invocation of Extended Period: The Tribunal addressed the issue of whether the extended period for Service Tax demand could be invoked. It was noted that IIPM had failed to register or file returns timely, despite the tax on Commercial Training or Coaching Centre being effective from 01/07/2003. The Tribunal found that the Department was justified in invoking the extended period due to IIPM's non-compliance with registration and filing requirements. 4. Penalties and Interest: The Tribunal set aside the Adjudicating Authority's order to the extent that it dropped the Service Tax demand. The entire demand raised in the show cause notice dated 10/02/2006 was upheld, along with interest under Section 75. Additionally, IIPM was held liable for penalties under Section 78 and Section 77 of the Finance Act, 1994, but no penalty was imposed under Section 76 due to the penalty under Section 78 being upheld. Conclusion: The Tribunal concluded that the Adjudicating Authority erred in dropping the Service Tax demand by misclassifying IIPM's activities. It upheld the entire Service Tax demand along with applicable interest and penalties, emphasizing that IIPM's courses fall within the ambit of "Commercial Training or Coaching" and are subject to Service Tax.
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