2018 (6) TMI 46 - AT - Service Tax

Commercial training or coaching services - Commercial Concern or not? - Liability of service tax - conducting of training programmes under the phrase continuing education and training programme which included short term programmes of basic subjects, sophisticated technologies and on topics of specialization of contemporary relevant subjects - Held that - The definition of Commercial Coaching and Training Services is added with an explanation to give the definition of the word commercial means to include charitable institutions or any other institution registered under Societies Act, like the appellant herein. During the period in question i.e. 1.07.2003 to 31.03.2006, the definition of Commercial Coaching and Training Services did indicate that if an assessee is issuing degree or certificate or diploma, if it is recognised by the law, the service tax liability does not arise - Since this plea that their Institution has been recognised by AICTE, the same was raised but was not considered by the adjudicating authority, the matter needs reconsideration by the adjudicating authority. Appeal allowed by way of remand.

Summary

Issues:
Service tax liability on training programmes conducted by the appellant under the category of "continuing education and training programme" from July 2003 to March 2006.

Analysis:
The appeal was filed against Order-in-Original No. 02/2008(ST), dated 28.02.2008, concerning the service tax liability on training programmes conducted by the appellant. The appellant, an institute offering training programmes for Engineers and Managers, shifted its service tax registration from "Chartered Engineering Service" to "Consulting Engineer Service." The Revenue alleged that the amounts collected for the training programmes fell under the category of commercial training or coaching classes, thus attracting service tax liability. The appellant contested this, claiming not to be a commercial institution but an institute formed for diversification of engineering services. The adjudicating authority held that the appellant had to discharge the service tax liability as they collected amounts from participants for the training imparted.

The appellant filed a miscellaneous application to raise additional grounds of appeal, arguing that during the relevant period, the definition of Commercial Coaching and training services exempted institutions issuing recognized certificates or diplomas. The appellant's institute was recognized by the All India Council for Technical Education (AICTE), which, according to the appellant, should exempt them from service tax liability under the commercial coaching definition. The Department reiterated the findings of the lower authorities.

The Tribunal noted that the appellant's main argument was that they were not commercial in nature and therefore not liable for commercial training and coaching services. However, the definition of "Commercial Coaching and Training Services" included charitable institutions or those registered under the Societies Act, like the appellant. A miscellaneous application was allowed to consider additional grounds raised by the appellant, particularly regarding the recognition of their institute by AICTE during the relevant period.

The Tribunal found merit in the appellant's submission that the recognition by AICTE could impact the service tax liability. As this point was not considered by the adjudicating authority, the matter was remitted back for reconsideration. The Tribunal did not express any opinion on the case's merits, granting the appellant the opportunity to respond to the show cause notice regarding the recognition of their institute by AICTE. The appeal was disposed of by remanding it to the adjudicating authority for a fresh consideration following the principles of natural justice.