2014 (12) TMI 1040 - AT - Service Tax

Commercial Training and Coaching service - Bar of limitation - Held that - demand pertains to the period September, 2003 to January, 2005. During this disputed period, Respondents were having valid permission from Chhattisgarh Government for functioning as University. When State Government itself granted them permission for running a University, there cannot be any intention of evasion of Service Tax by the Respondents. We therefore do not find any infirmity in the impugned Order-in-Appeal - Decided against Revenue.

Summary

Issues:
1. Validity of demand for service tax on fees collected by educational institution.
2. Time-barred appeal and intention of evasion of service tax.

Analysis:
1. The case involves a dispute regarding the demand for service tax on fees collected by an educational institution. The institution, M/s. IIAS Educational Society, was permitted to operate as a university by the Chhattisgarh Government under a specific law. However, they did not have approvals from statutory bodies like AICTE, NCTE as required by University Grant Commission Regulations, 2003. Subsequently, the Supreme Court declared the law under which the institution was permitted to function as ultra vires. The Department issued a Show Cause Notice demanding service tax on fees collected by the institution for the period from September 2003 to January 2005. The Deputy Commissioner confirmed the service tax amount and imposed penalties under relevant sections of the Act. The institution appealed to the Commissioner (Appeals), who allowed the appeal on the grounds of the demand being time-barred. The Revenue challenged this decision in the present appeal.

2. The Appellate Tribunal noted that during the disputed period, the institution had valid permission from the Chhattisgarh Government to function as a university. Given that the State Government itself granted this permission, the Tribunal concluded that there was no intention of evasion of service tax by the institution. As a result, the Tribunal found no fault in the Order-in-Appeal and upheld the decision of the Commissioner (Appeals), rejecting the Revenue's appeal. The Tribunal's decision was based on the absence of any evidence indicating deliberate evasion of service tax by the institution, considering the authorization granted by the State Government for its operations as a university.

This detailed analysis outlines the key legal issues, the facts of the case, the decisions made at different levels of the judicial process, and the reasoning behind the final judgment delivered by the Appellate Tribunal CESTAT NEW DELHI.