2018 (3) TMI 550 - AT - Service Tax

Commercial Training Coaching Services - coaching and training services to the students of Alagappa University Karaikudi and Periyar University - Held that - The fee is charged as per the directions of the university and the courses are also conducted as per the curriculum and guidelines provided by the university. The fees is paid directly to the university by the students in the form of demand drafts. The identical issue has been agitated before CESTAT Chennai in the appeal filed by JMC Educational Trust Vs CC Trichy 2010 (12) TMI 1150 - CESTAT CHENNAI where it was held that training and coaching provided by the appellant therein is an essential part of a course or curriculum of a university. From the documents available in file it is found that the appellant has been authorized as a Study Centre under a Memorandum of Understanding entered into with Alagappa University on the basis of Distance Education Council (DEC) guidelines issued under the IGNOU Act 1985. This being so appellant would be exempted from service tax levy during the period of dispute under Section 65 (27) of the Act even without benefit of N/N. 10/2003-ST. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Interpretation of "Commercial Training Coaching Services" under Section 65 (26) of the Finance Act, 1994; Applicability of exemptions under Notification No.10/2003-ST; Whether services provided fall within the definition of "Commercial Training or Coaching Services"; Validity of demand of service tax, interest, and penalties.

Analysis:
The case involved the provision of coaching and training services to students of two universities, with the Department asserting that these services fell under "Commercial Training Coaching Services" under Section 65 (26) of the Finance Act, 1994. Show cause notices were issued, leading to demands of service tax, interest, and penalties. The original authority and Commissioner (Appeals) upheld these demands, prompting appeals by the appellants.

The appellant argued that they were a study center affiliated with a university, with fees collected from students remitted to the university. They contended that the services provided did not fall under "Commercial Training or Coaching Services" as per the Finance Act, 1994. The appellant cited a previous decision by CESTAT Chennai in support of their position.

The respondent supported the findings in the impugned order, highlighting that exemptions under Notification No.10/2003-ST would not apply if charges were collected apart from fees. They argued that the services provided by the appellant fell within taxable services of commercial training or coaching centers.

Upon hearing both sides, the Tribunal noted that fees were paid directly to the university by students, and agreements existed appointing the appellant as an authorized Study Center of the university. The Tribunal referenced previous decisions and legal provisions, ultimately determining that the appellant was exempt from service tax levy during the dispute period under Section 65 (27) of the Act, even without the benefit of Notification No.10/2003-ST.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals, providing consequential benefits as per law. The decision was based on the interpretation of relevant legal provisions, exemptions, and the specific circumstances of the case, aligning with previous rulings and established principles.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's reasoning leading to the final decision in favor of the appellant.