2018 (4) TMI 663 - AT - Service Tax

Commercial coaching and training services - Appellant herein imparts education to their students for 11th and 12th Standards and Society is recognised by Andhra Pradesh Intermediate Board - It is the case of the Revenue that the demand of the service tax liability is correct as the appellant herein has not issued any certificate or diploma or degree or any educational qualification recognised by law which would exclude the appellants from service tax net. Held that - diagonally opposite views on the taxability of the services of the kind rendered by the appellant herein by the two Member Benches of the Tribunal - Since there is divergence of views between two Benches of the Tribunal of equal strength, it is imperative that the said difference be settled by a Larger Bench of the Tribunal. Hon ble President to constitute a Larger Bench to come to a conclusion as to which view would be correct in the circumstances.

Summary

Issues:
- Dispute over service tax liability on educational services provided by the appellant
- Interpretation of the definition of "Commercial Training or Coaching Centre"
- Conflict between different Tribunal decisions on the taxability of similar services

Analysis:
1. The appeals revolve around the demand for service tax on educational services provided by the appellant, categorized as commercial coaching and training services. The appellant imparts education for 11th and 12th Standards, including preparation for IIT Entrance/EAMCET exams. The Revenue argues that the absence of a recognized educational qualification excludes the appellant from service tax exemption, while the appellant contends that certificates issued by the Intermediate Board and college principals cover the exclusion criteria.

2. The Tribunal referred to a previous case where a Third Member's interpretation of the definition of "Commercial Training or Coaching Centre" emphasized the inclusive nature of the term, stating that coaching classes cannot be excluded unless specifically mentioned. The Tribunal found that coaching classes offered by the appellant were distinct from intermediate courses, leading to the conclusion that service tax was applicable on such coaching classes.

3. Another Tribunal case highlighted conflicting views on the taxability of services similar to those provided by the appellant. The Tribunal noted opposing interpretations regarding the recognition of degrees by law, affiliations with recognized institutions, and specific exemptions for vocational training institutes. The differing opinions necessitated a resolution by a Larger Bench of the Tribunal to determine the correct interpretation in the given circumstances.

4. The judgment acknowledged that the Revenue had appealed to the Supreme Court, while the appellant had approached the High Court regarding a previous Tribunal decision. Consequently, the Registry was instructed to forward the order and relevant case law annexures to the Hon'ble President to constitute a Larger Bench for resolving the conflicting views on the taxability of services provided by the appellant.

In conclusion, the judgment addresses the contentious issue of service tax liability on educational services, delves into the interpretation of relevant legal definitions, and highlights the necessity for a Larger Bench to reconcile conflicting Tribunal decisions on similar matters.