2018 (8) TMI 101 - AT - Service Tax

Commercial training or coaching Services - imparting education in courses - B.Sc. Management/ BBA - M.Sc. International Business - PGDM/PGP/MBA - Diploma in design. Whether imparting of these courses by the appellants constitute rendering a service of commercial training or coaching centre? - Held that - Though the contention of the appellant is that they are recognized universities under IGNOU and AICT and PTU all being the state functionaries the appellant also becomes the university recognized by law - there is no single document produced by the appellants to show that IILM has ever been recognized as deemed university by any of the universities constituted under law. Mere approval in their favour by any such government university for conducting certain courses by distant education or by permitting them to do so under convergence scheme cannot cloth them with the title of deemed university. Course which is vocational in nature - N/N. 24/2004-ST dated 10.09.2004 - Held that - Perusal of said Notification clarifies that the same is not applicable to the appellants. Vocational training institute as per the explanation of said Notification is held to mean an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades as notified under the Apprentices Act 1961. There is nothing on record to prove said affiliation - demand confirmed. Extended period of limitation - penalty - Held that - The appellants are admittedly imparting education against heavy considerations. It is apparent on record that they have tried to avoid their tax liability under different pleas i.e. on the ground of them being a charitable trust another ground of them being a deemed university and of them being imparting education under the aegis of the bodies constituted under the force of law - the appellants being an education imparting institute cannot be presumed to have acquired a wrong interpretation of the legal provisions or notifications or circular still taking the benefit thereof is definitely a deliberate non-disclosure of correct fact and as such suppression of fact - extended period and penalty rightly invoked. Appeal allowed - decided in favor of Revenue.

Summary

Issues Involved:
1. Whether the appellant's courses constitute commercial training or coaching services.
2. Applicability of exemption under Notification No. 33/2011 and Notification No. 24/2004-ST.
3. Invocation of the extended period of limitation.
4. Legitimacy of penalties imposed.

Issue-wise Detailed Analysis:

1. Commercial Training or Coaching Services:
The primary issue was whether the courses offered by the appellant (B.Sc. Management/BBA, M.Sc. International Business, PGDM/PGP/MBA, and Diploma in Design) constituted commercial training or coaching services. The Tribunal examined the definitions under Section 65(26), 65(27), and 65(105)(zzc) of the Finance Act, 1994. It was noted that the appellant charged fees for these courses, and the degrees were issued by the appellant itself, not by a recognized university. Hence, the Tribunal concluded that the appellant was providing commercial training or coaching services, making them liable for service tax under the Finance Act, 1994.

2. Exemption under Notification No. 33/2011 and Notification No. 24/2004-ST:
The appellant claimed exemptions under Notification No. 33/2011 and Notification No. 24/2004-ST. The Tribunal clarified that the exemption under Notification No. 33/2011 applies to coaching or training leading to recognized qualifications. Since the appellant's courses were not recognized by any law, this exemption was not applicable. Similarly, Notification No. 24/2004-ST pertains to vocational training institutes affiliated with the National Council for Vocational Training, which the appellant failed to prove. Thus, the exemptions were rightly denied by the adjudicating authority.

3. Invocation of Extended Period of Limitation:
The Tribunal addressed the appellant's challenge to the Show Cause Notice dated 24.04.2009, which invoked the extended period of limitation. The Tribunal found that the appellant's actions, such as claiming to be a charitable trust and a deemed university, were strategies to evade tax liability. Given the deliberate non-disclosure and misrepresentation of facts, the Tribunal upheld the Department's right to invoke the extended period of limitation, citing precedents from the Hon'ble Apex Court in Cosmic Dye Chemical Vs. Collector and Anand Nishikawa Company Ltd. Vs. Commissioner, Meerut.

4. Legitimacy of Penalties:
The Tribunal examined the penalties imposed and the adjudicating authority's decision to waive them based on the appellant's alleged bona fide doubt. The Tribunal disagreed with this finding, emphasizing that the appellant's conduct indicated a clear intent to evade tax. Consequently, the Tribunal set aside the impugned order's waiver of penalties, confirming the demand along with proportionate interest and penalties.

Conclusion:
The Tribunal rejected the appellant's appeal (No. ST/55526/2013) and allowed the Department's appeal (No. ST/56508/2013). The demand of Rs. 11,45,24,226/- was confirmed along with interest and penalties. The Tribunal's decision was pronounced in the open court on 30.07.2018.