2015 (8) TMI 641 - AT - Service Tax

Commercial Training and Coaching Services - Assessee contends that they are charitable institute - Penalty u/s 78 - Invocation of extended period of limitation - Held that - Tribunal in the case of Great Lakes Institute of Management (2013 (10) TMI 433 - CESTAT NEW DELHI - LB) has specifically held that the service tax liability arises on the charitable institutes which has now been affirmed by retrospective amendment. To that extent we reject the claim and uphold that they are liable for service tax liability under the category Commercial Training or Coaching Services. - in both the show-cause notices the demands raised beyond the limitation period are liable to be set aside as per the ratio of majority decision in the case of Shri Chaitanya Educational Committee (2015 (6) TMI 627 - CESTAT BANGALORE (LB)). Since the demand for extended period is set aside consequently, interest and penalties are also get set aside. Claim as regards reduction of service tax liability on hotel fees and refund of fees which they have claimed as per the approval of the All India Council of Technical Institute for Indira College of Science needs to be considered in its correct perspective. The claim of the appellant that reduction of hotel fees and refund fees and cum-tax is upheld by the Tribunal in the case of I2IT Pvt. Ltd. (2014 (9) TMI 345 - CESTAT MUMBAI) is correct and we hold that the appellant is eligible for this benefit from the tax liability which needs to be recalculated. - extended period cannot be invoked - Penalty u/s 78 is also set aside - Decided partly in favour of assessee.

Summary

Issues Involved:
Service tax liability under Commercial Training and Coaching Services, limitation period for demands, applicability of penalties under Section 78, tax liability on Teaching English courses.

Analysis:

1. Service Tax Liability under Commercial Training and Coaching Services:
The appeal challenged the demand raised in show-cause notices for the period 2003-2008, claiming exemption as a charitable institute. The appellant argued against the liability, citing various judicial forums and a retrospective amendment. However, the Tribunal rejected the claim, citing a previous decision that charitable institutes are liable for service tax under Commercial Training or Coaching Services.

2. Limitation Period for Demands:
The appellant contended that demands beyond the limitation period should be set aside, referring to a precedent where extended period benefits were granted due to conflicting judgments. The Tribunal agreed, setting aside demands beyond the limitation period, along with associated interest and penalties. The exact calculation of demands within the limitation period was left to the lower authorities for further assessment.

3. Applicability of Penalties under Section 78:
Regarding penalties under Section 78, the Tribunal considered the majority decision in a specific case and set aside penalties within the limitation period. Interest on service tax liability within the limitation period was to be recalculated by the adjudicating authority, with penalties discharged by the appellant.

4. Tax Liability on Teaching English Courses:
The appellant raised a specific issue regarding the tax liability on fees for teaching English, claiming coverage under specific notifications and circulars. The Tribunal upheld tax liability within the limitation period for these courses, citing a relevant precedent, but rejected the invocation of the extended period.

In conclusion, the appeal was disposed of, remanding the matter back to the adjudicating authority for recalculating the service tax liability as per the Tribunal's observations.