2023 (8) TMI 251 - AT - Service Tax

Classification of services - Management or Business consultant service or not - conducting examinations for selection of candidates for admission to various courses and other evaluating examinations - benefit of exemption N/N. 14/2004 ST dt.10.9.2004 - HELD THAT - Tribunal in the Respondent s own case for the earlier period i.e. from December 2007 to March 2012 M/S. MERIT TRAC SERVICES PVT LTD VERSUS C.C.E C.S.T. -BANGALORE SERVICE TAX-I 2019 (3) TMI 520 - CESTAT BANGALORE interpreting the same agreements referring to the same judgements held that the allegation of the department that the services rendered by the respondent fall under the category of Management or Business consultant service cannot be sustained as the services rendered by the respondent to the Universities do not fit into the definition of Management or Business consultant service. There are no reason not to follow the said precedent and also no sound argument advanced by the Revenue to set aside the analysis of facts and conclusion recorded by the Ld. Adjudicating authority in applying the principles of law laid down by the Tribunal in the series of case laws referred by him in the impugned Order. The Department s argument is that the respondent has rendered assistance in carrying out the examinations under the said agreement but in fact the exams are conducted by the university itself; hence the services fall within the scope of Management or Business Consultant Services - but the stand of the department is devoid of merit. A careful reading of the scope of the service mentioned in the said agreement, referred to and analysed by the learned Commissioner in the impugned Order, clearly indicates that the respondents being experts in the field, approached by the Universities to carry out the exams for the university, to identify the talented candidates for enrolment and other purposes to various courses and the methodology/procedure for the execution of the said objective narrated in the form of agreement. The respondent s role is to execute the conduct of exams by providing necessary manpower, expertise, infrastructure etc. as stipulated in the said agreement - Further, the learned Commissioner has rightly extended the benefit of Notification No.14/2004-ST dt. 10.09.2004 as the services rendered by the respondent relates to educational services. The judgments cited by the learned AR in the case of M/S PIEM HOTELS LTD, THE INDIAN HOTELS COMPANY LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COMMISSIONER OF SERVICE TAX 2016 (4) TMI 290 - CESTAT MUMBAI and KARNATAKA UDYOG MITRA VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE 2015 (5) TMI 534 - CESTAT NEW DELHI are not relevant and applicable to the facts of the case in hand. The impugned order is upheld and the appeal filed by the Revenue being devoid of merit, is accordingly rejected.

Summary

Issues Involved:
1. Classification of services rendered by the respondent.
2. Eligibility for exemption under Notification No.14/2004-ST dated 10.09.2004.

Summary:

Issue 1: Classification of Services Rendered by the Respondent

The primary issue was whether the services provided by the respondent to Manipal University (MU) and Sikkim Manipal University (SMU) under the agreement dated 08.07.2008, specifically in conducting examinations for candidate selection and other evaluations, fall under the scope of "Management or Business Consultant Service" as defined under Section 65(65) of the Finance Act, 1994. The Revenue contended that the respondent's activities, which included identifying and organizing venues, providing university representatives, and managing examination delivery, constituted "Management or Business Consultant Service" and thus did not qualify for the claimed exemption.

The Tribunal analyzed the agreement and found that the respondent's role was primarily executory, involving the conduct of exams and related activities, rather than providing advisory or consultancy services related to management functions. The Tribunal referenced several precedents, including decisions in Rolls Royce Industrial Power (I) Ltd. and Nirulas Corner House Pvt. Ltd., which clarified that executory services do not fall under "Management or Business Consultant Service." Therefore, the Tribunal concluded that the services rendered by the respondent did not meet the definition of "Management or Business Consultant Service."

Issue 2: Eligibility for Exemption under Notification No.14/2004-ST

The second issue was whether the respondent was eligible for the benefit of exemption under Notification No.14/2004-ST dated 10.09.2004. The Tribunal noted that the notification exempts services provided in relation to education by a body corporate on behalf of a client. The Tribunal found that the respondent's services, which involved administering examinations for educational institutions, were indeed related to education and thus qualified for the exemption.

The Tribunal upheld the learned Commissioner's decision, which had concluded that the services provided by the respondent were educational in nature and eligible for the exemption under Notification No.14/2004-ST. The Tribunal dismissed the Revenue's appeal, finding no merit in their arguments and affirming that the services rendered by the respondent did not fall under "Management or Business Consultant Service" but were instead related to educational activities.

Conclusion:

The Tribunal upheld the impugned order, affirming that the services rendered by the respondent were not "Management or Business Consultant Services" but were related to educational activities, thus qualifying for the exemption under Notification No.14/2004-ST. The Revenue's appeal was rejected.