2009 (11) TMI 544 - AT - Service Tax

Commercial Training or Coaching Centre and Convention services - funds raised for carrying on its activities through fees, donations or gifts, government grants, subscriptions, membership fees, course fees and other modes of raising money including the sale of publications towards attainment of main objects Held that - activities undertaken by the respondents are not covered under the category of Commercial Training or Coaching Services and they are not liable for payment of Service Tax - appeal filed by the Revenue is devoid of merits and rejected

Summary

Issues Involved:
1. Classification of the respondent as a Commercial Training or Coaching Centre.
2. Classification of the respondent's activities under Convention Service.
3. Demand for service tax and interest.
4. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.

Detailed Analysis:

1. Classification of the respondent as a Commercial Training or Coaching Centre:
The respondents are engaged in conducting a Post Graduate Diploma course in Insurance (IPGDI). The Deputy Commissioner issued a letter to the respondents to obtain Service Tax Registration under the category of Commercial Training and Coaching. The respondents contended that they are not a commercial training center as they are registered under Section 25 of the Companies Act, 1956, and their income is exempt under Section 11 of the Income Tax Act. The Department argued that the respondents' activities fall under the definition of Commercial Training or Coaching Service as per Section 65(27) of the Finance Act, 1994, which includes institutions providing commercial training or coaching and does not exclude those issuing certificates not recognized by law. The Commissioner (Appeals) concluded that the respondent is not a commercial concern, as it is a non-profit organization formed by IRDA and the Government of Andhra Pradesh. The Tribunal upheld this view, noting that the respondent's activities are not for profit and are aimed at public utility.

2. Classification of the respondent's activities under Convention Service:
The Department also classified the respondents' activities of conducting seminars, conferences, and lectures as Convention Service, liable for service tax. The Commissioner (Appeals) set aside this classification, and the Tribunal agreed, finding no merit in the Department's contention.

3. Demand for service tax and interest:
The Joint Commissioner confirmed a demand of Rs. 4,76,013/- towards service tax under Section 73(2) of the Finance Act, 1994, along with interest under Section 75. The Commissioner (Appeals) set aside this demand, and the Tribunal upheld this decision, noting that the respondents' activities do not attract service tax liability under the categories mentioned.

4. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994:
Penalties were imposed under Sections 76, 77, and 78 of the Finance Act, 1994. The Commissioner (Appeals) set aside these penalties, and the Tribunal agreed, stating that when no demand of service tax is sustainable, there is no justification for imposing penalties.

Conclusion:
The Tribunal upheld the decision of the Commissioner (Appeals) that the respondents are not a commercial concern and their activities do not attract service tax liability under Commercial Training or Coaching Service or Convention Service. The appeal filed by the Revenue was rejected, and the order of the Commissioner (Appeals) was deemed correct and legal.