2018 (6) TMI 1303 - AT - Service Tax

Commercial training or coaching service - Scope of Vocational Training - fees charged from candidates registered for the Masters in Business Administration programme - case of appellant is that the liability to tax does not arise as they are not in the business of providing education but are a public institution in which Government of India and its insurance undertakings are owners - Held that - It is seen that the consideration received from students enrolled for education are, owing to legislative intent, indeed taxable and that, to the extent of specific exclusion in the taxable entry, conformity with the description therein has to be strictly adhered to. That the appellant is a provider of training and coaching service is not disputed. Despite the inclusion of commercial in the description of the taxable service, the absence of a profit motive, does not, of itself, alter the tax liability. It suffice that earnings are received for an activity to be commercial. Non- availability of an affiliation for the award of a degree at the end of the course it takes the activity out of the exclusion. As far as management and business consultancy service is concerned, it is seen that the consideration was received by them for various reports submitted by their students to outside bodies on conclusion of various projects as part of curriculum of the course. Undoubtedly, these may be of use to the outside entity but they are not the product of a professional business consultant. Accordingly, the tax as provider of management and business consultancy may not sustain. Time Limitation - Held that - The appellant themselves having made a full disclosure of these circumstances to the service tax authorities and they were guided entirely about the tax liability exists; it cannot, by any stretch, be found that appellant had misrepresented to the competent authority - extended period of limitation cannot be invoked - duty liability restricted for normal period. Appeal allowed in part.

Issues Involved:
1. Tax liability on 'commercial training or coaching service'
2. Tax liability on 'business auxiliary service'
3. Tax liability on 'management of business consultancy service'
4. Tax liability on 'convention service' and 'mandap keeper service'
5. Tax liability on 'renting of immovable property service'
6. Applicability of the extended period of limitation due to alleged suppression or misrepresentation

Detailed Analysis:

1. Tax liability on 'commercial training or coaching service':
The appellant, a society registered under the Societies Act, 1860, and Bombay Public Trust Act, 1950, argued that it was a public institution and not in the business of providing education. The appellant claimed exemption from tax under section 65(105)(zzc) of the Finance Act, 1994, relying on the recognition by the All India Council for Technical Education (AICTE). The adjudicating authority, however, confirmed the demand, stating that the appellant's activities did not qualify for exclusion as they were not affiliated with a university. The Tribunal referenced several decisions, including Sadhana Educational and People Development Services Ltd., to conclude that the appellant's courses did not qualify as vocational training and were thus taxable.

2. Tax liability on 'business auxiliary service':
The adjudicating authority found that the appellant rendered 'business auxiliary service' by conducting examinations for its constituent members. The appellant argued that there was no client-principal relationship, and thus, it was not liable to tax under section 65(105)(zzb) of the Finance Act, 1994. The Tribunal noted the lack of cogent findings on this issue and questioned the connection between conducting examinations and providing 'business auxiliary service'.

3. Tax liability on 'management of business consultancy service':
The appellant received consideration for reports submitted by students as part of their curriculum. The adjudicating authority taxed this under 'management and business consultancy service'. The Tribunal found that these reports, although useful to outside entities, were not products of professional business consultants and thus did not sustain the tax under this category.

4. Tax liability on 'convention service' and 'mandap keeper service':
The appellant argued that it had already discharged tax liability as a provider of 'mandap keeper service' and should not be taxed again under 'convention service'. The Tribunal accepted this argument, stating that once tax liability as a 'mandap keeper' was acknowledged, it could not be taxed under a different category for the same consideration.

5. Tax liability on 'renting of immovable property service':
The appellant contended that the dispute over this taxability was pending before the Supreme Court. The Tribunal did not find favor with the various claims for exclusion from tax in this category.

6. Applicability of the extended period of limitation due to alleged suppression or misrepresentation:
The appellant claimed that there was no suppression or misrepresentation on their part, arguing that the extended period of limitation should not apply. The Tribunal noted that the appellant had made full disclosure to the service tax authorities and had been guided by their directions. The Tribunal concluded that the demand for the period beyond the normal limitation period was barred, as the appellant's activities and non-payment of tax were known to the authorities.

Conclusion:
The Tribunal modified the impugned order, restricting the duty liability to the normal period of limitation and dismissing the extended period due to the lack of misrepresentation or suppression by the appellant.

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