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2021 (11) TMI 514 - AT - Service TaxLevy of service tax - Commercial Coaching or Training Services - it appeared to Revenue that the appellants are evading payment of service tax as they are conducting training courses and providing certificates to the students without the approval of either University Grants Commission (UGC in short) or by All India Council of Technical Education (AICTE), therefore, are not recognised by law - period of dispute April, 2009 to 2015-16 (upto March, 2016) - time limitation. W.e.f. 01.07.2012 - HELD THAT - The coaching or training leading to grant of a certificate or diploma or Degree or any educational qualification, which is recognised by any law for the time being in force, have been kept out of the scope of service tax, as defined under Section 65(105) (zzc), upto the period 30.06.2012 vide Notification No. 10/2003-ST dated 20.06.2003 read with Notification No. 33/2011-ST dated 25.04.2011 - Period 01.04.2009 to 26.02.2010 - HELD THAT - The Adjudicating Authority has misconceived the scope of taxable and /or chargeability to tax and have erred in coining his own definition of the term vocational training and coaching which is not provided in the statute. The refusal to grant exemption to the appellant, inspite of admission by the learned Commissioner - that appellants are providing education/ vocational training, but the conclusion that such courses shall not qualify as vocational course due to the quantum of fee charged (high). We further find that the learned Commissioner has rejected the benefit of exemption and/or exclusion provided in the statute from tax, by observing that courses provided by the appellants are professional and technical in nature as well as glamorous - such interpretation is wholly misconceived. The Adjudicating Authority has failed to appreciate that there is no such bar (with respect to the quantum of fee), in the statute for grant of exemption. Further, the list of services (enumerated in Circular No. 59/8/2003) being in the nature of vocational courses is by way of example only. Further, the list ends with the word etcetera/etc., the conscious use of the word etc. indicates the wide scope of the exemption notification. Such observation of the learned Commissioner are by way of conjecture and surmises, have no legal sanctity - the Commercial training/ education/ coaching provided by the appellants imparts skills to the students/ trainees to enable them to seek employment or undertake self-employment directly upon completion of the course. Period 27.02.2010 to 30.06.2017 - HELD THAT - The learned Commissioner have admitted in the show cause notice itself, that MU is sending their students for training/ education with respect to various courses like Mass Communication, acting, etc. to the campus of the appellants. We further find that there is no such requirement as to affiliation from a University. The only requirement is, that the course being taught should be part of a curriculum, leading to grant of degree / diploma, recognised by law. Admittedly, the issue of degree/ diploma by the respective Universities have not been found to be fraudulent - admitted fact is that the appellant s institutions are run by a Charitable Institute namely Asian School of Film and TV , which is recognised and registered under Section 12A/ 12AA of the Income Tax Act. Right from beginning till 30.06.2017 the activity of the appellant in providing educational /vocational training to their students, is as per the pre defined curriculum in collaboration with the respective University, is exempt throughout,as they have provided education and training followed by issue of certificate of degree/ diploma which is recognised by law for the time being in force. Further, we find that on completion of the courses conducted by the appellants, the students/ trainees have either received employment and/or are competent to be self employed. The appellants is not liable to service tax. Time Limitation - HELD THAT - The appellant(s) were under bonafide belief that their activity is not liable to service tax and further we find that the appellants have maintained proper record of their activity and have been making compliance with various laws including Income Tax Act, as a charitable organisation. The books of accounts have been regularly audited and have been filed with various Government Authorities - Admittedly, the only allegation made in the show cause notice for invoking the extended period of limitation is that the appellants have failed to take registration, assess their tax liability, pay the tax, file the returns etc. Admittedly, the whole demand is based on data and information supplied by the appellant as has been demanded by the Revenue. Accordingly, we hold that extended period of limitation is not attracted and the show cause notice(s) are bad for invocation of extended period of limitation. Appeal allowed - decided in favor of appellant.
Issues Involved
1. Liability of appellants to pay service tax under 'Commercial Coaching or Training Services' from April 2009 to March 2016. 2. Validity of affiliations and recognitions of the appellants' institutions. 3. Applicability of exemptions under various notifications and statutory provisions. 4. Invocation of extended period of limitation for service tax demand. Detailed Analysis 1. Liability of Appellants to Pay Service Tax The primary issue was whether the appellants were liable to pay service tax under 'Commercial Coaching or Training Services' for the period from April 2009 to March 2016. The Revenue argued that the appellants were evading service tax by conducting training courses without approval from recognized bodies like UGC or AICTE. The appellants contended that their courses were vocational and exempt from service tax under various notifications. 2. Validity of Affiliations and Recognitions The appellants claimed affiliations with Punjab Technical University (PTU) and Mewar University (MU), providing degrees and certificates recognized by these universities. However, the Revenue challenged the validity of these affiliations, stating that the appellants were not authorized to issue such degrees and that the affiliations were not recognized by law. The Tribunal found that the appellants had collaborated with PTU and MU, and the degrees were issued by these universities, thus validating the affiliations. 3. Applicability of Exemptions The appellants argued that their courses were exempt from service tax under various notifications: - Notification No. 24/2004-ST: Exempted vocational training institutes from service tax. - Notification No. 33/2011-ST: Exempted coaching or training leading to recognized educational qualifications. - Negative List (Section 66D): Exempted education as part of a curriculum for obtaining a recognized qualification. The Tribunal agreed with the appellants, stating that their courses imparted skills enabling employment or self-employment, thus qualifying as vocational training. The Tribunal also noted that the degrees issued by PTU and MU were recognized by law, making the courses exempt under the relevant notifications. 4. Invocation of Extended Period of Limitation The Revenue invoked the extended period of limitation, alleging that the appellants failed to register, assess their tax liability, pay the tax, and file returns. The Tribunal held that the appellants were under a bona fide belief that their activities were not liable to service tax. The Tribunal found no evidence of malafide intent and ruled that the extended period of limitation was not applicable, making the show cause notices invalid. Conclusion The Tribunal concluded that the appellants were not liable to pay service tax for the disputed period. The courses provided by the appellants were vocational and exempt from service tax under the relevant notifications. The affiliations with PTU and MU were valid, and the degrees issued were recognized by law. The invocation of the extended period of limitation by the Revenue was unjustified. The appeals were allowed, and the impugned order was set aside, granting consequential benefits to the appellants.
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