2010 (2) TMI 292 - AT - Service Tax

Stay pre deposit - Commercial Training or Coaching service Held that - courses in respect of which degrees are conferred by the recognized universities stand excluded from the definition of commercial training or coaching service and hence fall outside the ambit of service tax. In view of the submissions made by the learned Chartered Accountant supported by the result sheets of the University of Madras, we are satisfied that the appellants have a prima facie case in their favour pre deposit waived.

Summary

Issues:
1. Whether the appellants are providing 'Commercial Training or Coaching service'?
2. Validity of the service tax demand against the appellants.
3. Recognition of SRM Institute of Hotel Management as an independent entity.
4. Exclusion of courses with degrees conferred by recognized universities from service tax.

Analysis:
1. The judgment revolves around the issue of whether the appellants are providing 'Commercial Training or Coaching service.' The impugned order confirmed a service tax demand against the appellants, along with interest and penalties. The appellants argued that the demand was confirmed against SRM Institute of Hotel Management, which is not a legal entity but a department under SRM Arts and Science College, a unit of Valliammai Society. The society is a charitable institution, and the courses taught by the college, including Hotel and Catering Management, are recognized by the University of Madras. The appellants contended that the courses with degrees conferred by recognized universities are excluded from the definition of 'commercial training or coaching service,' thus falling outside the ambit of service tax.

2. The learned Chartered Accountant representing the appellants presented facts to the adjudicating Commissioner, highlighting the affiliation of SRM Arts and Science College with the University of Madras, which confers degrees and diplomas to successful students. Despite these submissions, the SRM Institute of Hotel Management was held to be an independent entity erroneously. The issue of the validity of the service tax demand against the appellants was a focal point in the arguments presented before the Tribunal.

3. The Tribunal, after hearing arguments from both sides and reviewing the case records, found that courses leading to degrees conferred by recognized universities are excluded from the purview of 'commercial training or coaching service.' Supported by evidence such as result sheets from the University of Madras, the Tribunal was satisfied that the appellants had a prima facie case in their favor. Consequently, the Tribunal waived the requirement of predeposit and stayed the recovery during the pendency of the appeal, recognizing the importance of the evidence presented regarding the educational nature of the courses offered by the appellants.

4. The judgment clarifies the distinction between courses offered by educational institutions leading to degrees conferred by recognized universities and 'commercial training or coaching service' subject to service tax. By emphasizing the exclusion of certain courses from the ambit of service tax based on their educational nature and university recognition, the Tribunal provided a nuanced interpretation of the relevant legal provisions, ultimately benefiting the appellants in this case.