2017 (11) TMI 1271 - AT - Service Tax

Commercial Training or Coaching Services - view of the Revenue is that the course, B.Sc (Hon.) in Business and Management Studies, conducted by the appellant asessee is not recognized by any statutory authority in India - scope of service. Held that - degree or diplomas issued by foreign universities are examined for recognition for further education in India or for employment. It is clear that the courses conducted by the appellant assessee results in award of degree of B.Sc (Hon.) by the Bradford University. The said university is an accredited university by the Association of Common Wealth Universities - The Ministry of Human Resource Development, Govt. of India, clarified that AIU is entrusted with recognition of degrees or diplomas awarded by accredited universities in India and abroad for the purpose of admission to higher courses at Indian Universities. The Tribunal while examining a similar dispute in the case of M/s ITM International Pvt Ltd 2017 (11) TMI 1230 - CESTAT NEW DELHI (LB) held that Ministry of HRD vide Notification dated 13.03.1995 stated that the Govt. of India had decided that those foreign qualifications which are recognized/equated by the AIU are treated as recognized for the purpose of employment services under the Central Government. No separate orders for recognition of such foreign qualification is needed to be issued. The Tribunal also noted that UGC had advised Indian students to ascertain information regarding equivalence of the degrees and diplomas awarded by accredited Universities abroad. While examining these facts, The Tribunal in the said case held that the course offered by appellants resulting in the issue of certificate by the University of London, which is treated as equivalent to degree or diploma issued by Universities in India, the appellant was held to be falling outside the scope of definition for Commercial Training or Coaching Centre . The appellant-assessee is falling under the excluded category for tax purpose - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues Involved:
Tax liability of the appellant-assessee for conducting educational courses resulting in a degree from a foreign university under the category of Commercial Training or Coaching.

Analysis:
1. The dispute in this case revolves around the tax liability of the appellant-assessee for conducting educational courses resulting in a degree of BSC (Hon.) in Business and Management Studies from the University of Bradford, UK. The Revenue contended that the consideration received from students for this course is subject to Service Tax under the category of Commercial Training or Coaching.

2. The appellant-assessee argued that they are engaged in education, not Commercial Coaching or Training. They highlighted that the course is recognized by the University of Bradford, an accredited member of the Association of Commonwealth Universities, and also recognized by the Indira Gandhi National Open University (IGNOU) and the Ministry of Human Resource Development clarified the role of AIU in evaluating foreign university courses.

3. The lower authority found that the course offered by the appellant-assessee is not recognized by AICTE or any Indian university. The degree awarded by the University of Bradford was not considered recognized under Indian law. The Association of Indian Universities (AIU) was deemed a coordinating agency, not a statutory body empowered to approve courses for the grant of recognized degrees.

4. The Tribunal noted that foreign degrees are examined for recognition in India for further education or employment. It was highlighted that the Ministry of Human Resource Development and University of Delhi recognized the degree in Business and Management Studies for admission to post-graduate programs. A previous Tribunal decision also emphasized that foreign qualifications equated by AIU are treated as recognized for employment under the Central Government.

5. The Tribunal analyzed a similar case and found that courses resulting in certificates equivalent to Indian degrees fall outside the scope of Commercial Training or Coaching. The decision of the Hon'ble Madras High Court in a related case was examined, where the educational activity was not excluded under vocational training, but the degree awarded was considered recognized, leading to the exclusion from Service Tax liability.

6. Ultimately, the Tribunal held that the appellant-assessee fell under the excluded category for tax purposes, as the educational courses offered resulted in recognized degrees. Consequently, the impugned orders were set aside, and the appeals filed by the appellant-assessee were allowed, while the appeal by the Revenue was dismissed.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the reasoning behind the Tribunal's decision regarding the tax liability of the appellant-assessee for conducting educational courses resulting in a foreign degree.