2018 (12) TMI 944 - AT - Service Tax

Non-payment of Service Tax - Commercial Coaching and Training Services - period from 1.4.2011 to 31.3.2013 - demand of service tax on other income shown in the balance-sheet for the year 2011-12 relating to various services on which Service Tax not paid invoking the extended period of limitation. Non-payment of Service Tax on commercial coaching and training services for the normal period of limitation - Held that - The judgment of this Tribunal in appellant own case 2017 (10) TMI 710 - CESTAT MUMBAI for the period 2006-07 to 2010-11 is squarely applicable, wherein this Tribunal upheld the adjudication order dated 30.3.2013 confirming the levy of Service Tax on the services of awarding Graduate/ PG Diploma relating to design management course by the appellant observing that it is taxable under category commercial coaching and training services - there is no justification or reason in not following the aforesaid finding of the Tribunal in the appellant's own case that the services rendered by the Appellant are in the nature of commercial training or coaching services and leviable service tax for the period in question. Other income shown in the balance-sheet for the year 2011-12 relating to various services on which Service Tax not paid invoking the extended period of limitation - Held that - All the information available in the balance-sheet under the head 'other income' was available to the department and while issuing the second show-cause but no objection was raised by the Revenue. We find merit in the contention of the Ld. Advocate for the Appellant - invoking longer period of limitation confirming the demand of ₹ 3,88,762/-, on 'other income' is untenable in law, hence, set aside. Penalty u/s 78 - Held that - Since the preset demand notices were issued as a continuation to the earlier notice invoking larger period of limitation and the present demand notices are for normal period of limitation, therefore, imposition of penalty under Section 78 cannot be sustained against the appellant - penalty u/s 78 set aside. However, penalty and interest imposed under the other provisions of the Finance Act, 1994 are hereby upheld. Appeal allowed in part.

Summary

Issues Involved:
1. Taxability of services under 'Commercial Coaching and Training Services'
2. Applicability of extended period of limitation
3. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994
4. Demand of Service Tax on 'other income'

Detailed Analysis:

1. Taxability of Services Under 'Commercial Coaching and Training Services':
The appellant, part of the Maharashtra Academy of Engineering and Educational Research (MAEER), provided Graduate and Post Graduate Diplomas in design fields. The Revenue alleged these services fell under 'Commercial Coaching and Training Services', demanding Service Tax for 2006-07 to 2010-11. The Tribunal previously upheld this classification, referring to the larger Bench decision in the case of Great Lakes Institute of Management Ltd. The Tribunal reiterated that the appellant's services did not fall under the exclusion for recognized educational qualifications, thus confirming their taxability under 'Commercial Coaching and Training Services'.

2. Applicability of Extended Period of Limitation:
The Tribunal upheld the invocation of the extended period of limitation, citing the appellant's failure to declare receipts or seek clarification from the department. The Tribunal noted the appellant's deliberate evasion of Service Tax, as evidenced by their non-registration and non-filing of returns, thereby justifying the extended period under Section 73(1) of the Finance Act, 1994.

3. Imposition of Penalties Under Sections 76, 77, and 78 of the Finance Act, 1994:
The Tribunal upheld penalties under Sections 76 and 77, noting the appellant's contravention of statutory obligations with intent to evade tax. However, it set aside the penalty under Section 78, as the present demand notices were for the normal period of limitation and not for the extended period.

4. Demand of Service Tax on 'Other Income':
The Tribunal found the Commissioner had correctly analyzed and reduced the demand on 'other income' from ?22,29,914/- to ?3,88,762/-. However, it set aside the demand for invoking the extended period of limitation, as the information was already available in the balance sheets and should have been considered in earlier show-cause notices.

Conclusion:
The Tribunal modified the impugned order, confirming the taxability of services under 'Commercial Coaching and Training Services' and upholding penalties under Sections 76 and 77. It set aside the penalty under Section 78 and the demand on 'other income' for invoking the extended period of limitation. The appeal was partly allowed to this extent.