2014 (1) TMI 512 - AT - Service Tax

Waiver of pre-deposit of duty service tax - Commercial training or coaching service - Held that - expression of commercial training or coaching centre occurring under the said sub-clause and also under clauses (26), (27) and (90A) of Section 65 shall include any centre or institution, by whatsoever name called, where training or coaching imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organization in any law for the time being in force and carrying on this activity with or without profit motive and the expression commercial training or coaching shall be construed accordingly. In the present case, we find that applicants approach All India Council for Technical Education to start MBA programme vide letter dt. 11.5.2004 is All India Council for Technical Education granted permission to conduct Post-graduate Programme in MBA on the condition that the Institution must have Affiliation to a University for the above courses before making admissions. In the absence of such Affiliation, this Letter of approval shall be treated as withdrawn. The applicant had not affiliated to any university till today. The courses are not recognized by any university or by the UGC. Therefore the activity undertaken by applicant comes under the scope of commercial training and coaching service - prima facie the applicant has not made out a case for total waiver of service tax - Conditional stay granted.

Summary

Issues:
Waiver of pre-deposit of duty service tax, demand under different categories, sustainability of demands, contention of applicant, financial hardship plea, suppression of facts, time bar, recognition by university, renting of immovable property, amendment of law.

Analysis:

1. Waiver of Pre-Deposit: The applicant sought waiver of pre-deposit of duty service tax amounting to Rs. 5,34,65,199/-, along with interest and penalty. The demands were made under various categories as per the show cause notice issued on 20.4.2012.

2. Sustainability of Demands - Commercial Training or Coaching Service: The applicant contended that their management courses were started with approval from the All India Council for Technical Education. They argued that as per a Supreme Court decision, approval was not required to start such courses, hence the demand was not sustainable. The applicant also claimed to be a charitable institution without profit motive, believing they were not liable for service tax.

3. Suppression of Facts: The Revenue alleged suppression of facts by the applicant regarding the affiliation of their MBA program to a university. The Revenue pointed out discrepancies in the information provided by the applicant to evade payment of service tax.

4. Financial Hardship and Time Bar: The applicant pleaded financial hardship and claimed they were under a bona fide belief that they were not liable to pay service tax. However, the Revenue argued that the applicant's actions indicated suppression of facts, making the demand sustainable.

5. Renting of Immovable Property: The demand related to renting of immovable property was also contested. The applicant claimed that the issue was under challenge before the Supreme Court, and hence they were not liable to pay service tax.

6. Recognition by University: The Revenue highlighted that the applicant's MBA program was not recognized by any university or the University Grants Commission (UGC), indicating non-compliance with approval conditions.

7. Amendment of Law: The law regarding the demand on renting of immovable property was amended with retrospective effect.

In conclusion, the Tribunal found that the applicant did not establish a case for a total waiver of service tax. They were directed to deposit 50% of the confirmed demand within eight weeks, with the remaining amount waived upon such deposit. Recovery of the waived amount was stayed pending the appeal process, with a compliance deadline set for 31.12.2013.