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2019 (4) TMI 183 - AT - Service TaxCourses offered by IIM (IIMA) - Commercial Training or Coaching Services - demand of service tax on long duration courses - demand on the ground that long duration courses are not approved by AICTE - issuance of second SCN - Extended period of limitation - Circular No. 86/4/2006 dated 01.11.2006 - validity of SCN - Held that - Till the introduction of Finance Act 2010 by which explanation was inserted in sub clause zzc of Section 65 (105) of the Finance Act, the term Commercial Coaching of Training Centre was deemed to have included only those centres which were rendering the service with profit motive as clarified vide Circular No. 86/4/2006-dated 01.11.2006 (S) - However with enactment of the Finance Act, 2011 the clause (27) of Section 65 of the Finance Act, the term Commercial Training or Coaching Centre would cover all trainings centers giving training for a consideration irrespective of the profit motive of the center. This change was given retrospective effect from 01.07.2003. It is seen that in the notice, the only ground raised is that the long term course on which demand has been raised are not recognized by AICTE etc. The law does not provide for recognition by AICTE as a pre-condition of exemption from tax. The language is very clear. Prior to 01.05.2011, institutes providing training leading to qualification recognized by law were outside the purview of tax. After 01.05.2011 coaching and training leading to qualifications recognized by law are exempted (upto 01.07.2012) and in the same fall under negative list thereafter. Thus the SCN is not sustainable as there is no allegation that the coaching or training provided by the appellant is not recognize by law. Non recognition by AICTE is not the same as non recognition by law. Recognition by law does not mean recognition by AICTE or AIU etc., but it means recognition by government in any significant manners. In the instant case, the courses under dispute have been recognized by government as equivalent to other degree/diploma courses for the purposes of employment and higher education. Moreover, Ministry of HRD has clearly laid down in their letter dated 31.01.2017 that recognition by AICTE or NBA accreditation is not required by IIMs. These facts have been affirmed by the letter of TRU dated 14.02.2017 - the long term course of IIM are courses recognized by law. In view of that the demand does not survive on merits. Time Limitation - Held that - There was not suppression and mis-declaration by the appellant. There was not malafide intention whatsoever, thus barred of the demand would also be liable to be set aside on account of limitation. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Confirmation of demand of Service Tax. 2. Interest and imposition of penalty. 3. Recognition of long-duration courses by AICTE. 4. Definition and scope of "Commercial Training or Coaching Centre." 5. Applicability of exemptions and retrospective amendments. 6. Limitation period for issuing show-cause notices. Detailed Analysis: 1. Confirmation of Demand of Service Tax: The appellant, an educational institution, was issued a show-cause notice (SCN) alleging that their long-duration courses were not approved by AICTE, and thus, they were required to pay Service Tax on these courses. The appellant argued that recognition by AICTE is not a necessary pre-condition for exemption from Service Tax, as long as the courses are recognized by any law. 2. Interest and Imposition of Penalty: The appellant contested the imposition of interest and penalties, arguing that they were providing educational services leading to qualifications recognized by law and thus should be exempt from Service Tax. They also pointed out calculation errors and claimed entitlement to cum-duty benefits for valuation of services. 3. Recognition of Long-Duration Courses by AICTE: The SCN's primary allegation was that the long-duration courses were not recognized by AICTE. The appellant countered this by stating that their courses were recognized by various governmental bodies and associations, including the Ministry of Education and the Association of Indian Universities. They provided evidence of recognition dating back to 1966 and argued that AICTE approval is not mandatory for exemption. 4. Definition and Scope of "Commercial Training or Coaching Centre": The appellant argued that their institution does not fall under the definition of a "Commercial Training or Coaching Centre" as per Section 65(27) of the Finance Act, 1994, which excludes institutes providing recognized educational qualifications. They cited various circulars and judicial decisions to support their claim that their primary objective is education, not profit. 5. Applicability of Exemptions and Retrospective Amendments: The appellant highlighted several circulars and amendments, including Circular No. 86/4/2006 and the Finance Act, 2010, which provided clarifications and exemptions for educational institutions. They argued that the retrospective amendments and circulars support their case for exemption from Service Tax for the period in question. 6. Limitation Period for Issuing Show-Cause Notices: The appellant argued that the extended period of limitation invoked in the SCN is not sustainable. They pointed out that earlier notices for short-term courses were dropped, and their institution was regularly audited by the revenue authorities. They cited the decision of the Hon'ble Apex Court in the case of Nigam Sugar Factory to argue that the extended period of limitation cannot be invoked in their case due to the absence of malafide intent and suppression of facts. Judgment Summary: The tribunal examined the definitions and exemptions related to "Commercial Training or Coaching Centre" and concluded that the appellant's courses are recognized by law and thus exempt from Service Tax. The tribunal noted that the SCN's reliance on AICTE recognition was misplaced, as the law does not mandate AICTE approval for exemption. The tribunal also addressed the issue of limitation, finding that the appellant had no malafide intent and had been transparent in their dealings with the revenue authorities. The tribunal set aside the demands, interest, and penalties, allowing the appeals in favor of the appellant. Conclusion: The tribunal ruled that the appellant's long-duration courses are recognized by law and thus exempt from Service Tax. The demands, interest, and penalties were set aside on both merits and limitation grounds. The appeals were allowed, providing relief to the appellant.
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