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2023 (10) TMI 1169 - HC - Service TaxCondonation of delay of one year and eight days in filing appeal - petitioner neither filed an appeal within the period of limitation under Section 85(3) of Finance Act, 1994 nor within the condonable period of limitation - providing services to various educational institutions - applicability of Mega Exemption Notification No.25 of 2012-ST- dated 20.06.2012 - HELD THAT - In this case, the Court concerned with Mega exemption Notification No.25/2012-S.T. dated 20.06.2012 issued under Sub -Section (1) to Section 93 of the Finance Act, 1994 as amended from time to time and Section 66D(l) of the Finance Act, 1994 until its deletion in 2016. In the case of Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore 2021 (4) TMI 819 - MADRAS HIGH COURT , a learned Single Judge of this Court accepted the claim of the petitioner therein in so far as exemption for payment of service tax on amounts collected towards affiliation. However, learned Single Judge did not accept the contention of the said University in so far as collection of rent from service providers like Bank, Post Office, Canteens, etc. In UNION OF INDIA VERSUS WOOD PAPERS LTD. 1990 (4) TMI 55 - SUPREME COURT , the Hon ble Supreme Court held that at the stage of applicability, the Notification has to be construed strictly and the ambit should not be widened or extended. It further held that once only when the first stage is crossed, the notification should be construed liberally that is other technicalities and procedural compliances should not come in the way of extending the benefit. There was no scope for expanding the scope of negative list in Section 66D(l) of the Finance Act, 1994 as the petitioner has not crossed the threshold. The Hon ble Supreme Court has repeatedly held that the operation of the notification has to be judged not by the object which the rule making authority had in mind but the words it has employed effectuate the legislative intend. Therefore, there is no scope for extending the benefit of Section 66 D(l)(ii) of the Finance Act, 1994 to the petitioner. With effect from 01.07.2012, under Section 66B of the Finance Act, 1994, service tax was to be levied at the rate specified therein on the value of services other than the services specified in the negative list provided or agreed to be provided in the taxable territory by one person to another and concluded in as much as the manner as may be prescribed - to begin with the services provided by the petitioner did not fall within the purview of negative list as defined in Section 65B(34) read with Section 66D(l)(ii) of the Finance Act, 1994 and/or as amended by Notification No.9 of 2016-S.T dated 01.03.2016. Therefore, the contention of the petitioner that the petitioner was outside the purview of Service Tax levy under Section 66B of the Finance Act, 1994 is liable to be rejected. The petitioner being a University recognized under the provisions of the UGC Act, 1956, has to be construed as an educational institution . As an educational institution , the petitioner would have been exempted from payment of service tax for renting out its immovable property for a brief period, till 1.4.2013 - The exemption for renting of immovable property was short lived. This exemption stood withdrawn in view of amendment to Entry 9 to Mega Exemption No.25/2012-S.T dated 20.06.2012 vide Notification No. 3/2013-S.T, dated 1-3-2013. This writ petition has to fail, on all counts except, for renting of immovable property for a brief period between 01.07.2012 and 31.03.2013. The said exemption is not available with effect from 01.04.2013 in view of amendment to vide Notification No.3/2013 ST dated 01.03.2013 amending Mega Exemption Notification No.25/2012 ST dated 20/06/2012 - After 1.4.2013, only if the petitioner had rented out its immovable property by to an Educational Institution . After amended to Mega Exemption Notification No.25/2012 ST dated 20/06/2012, vide Notification No.6/2014-S.T dated 11.07.2014, there was no exemption for renting of immovable property . Petition dismissed.
Issues Involved:
1. Validity of the impugned Order-in-Original confirming service tax and penalties. 2. Applicability of Section 66D(l)(ii) of the Finance Act, 1994. 3. Applicability of Mega Exemption Notification No.25/2012-ST dated 20.06.2012. 4. Maintainability of the writ petition due to limitation. Summary: Issue 1: Validity of the Impugned Order-in-Original The petitioner challenged the Order-in-Original No.27 of 2019 (ST) dated 29.10.2019, which confirmed a service tax demand of Rs. 1,19,85,616/- along with interest and penalties under Sections 75 and 78 of the Finance Act, 1994. The consequential recovery order dated 06.10.2020 was also contested. Issue 2: Applicability of Section 66D(l)(ii) of the Finance Act, 1994 The petitioner argued that the services provided fell within the "negative list" under Section 66D(l)(ii) of the Finance Act, 1994, and were thus exempt from service tax. The court, however, held that the services provided by the petitioner, such as affiliation and renewal of affiliation, did not fall within the purview of "education as a part of a curriculum for obtaining a qualification recognized by law." The court emphasized that the language of Section 66D(l) was plain and unambiguous, leaving no room for interpretation. Issue 3: Applicability of Mega Exemption Notification No.25/2012-ST dated 20.06.2012 The petitioner contended that the services were exempt under the Mega Exemption Notification. The court examined the amendments to the notification and concluded that the services provided by the petitioner did not qualify as "auxiliary educational services" or services related to admission or conduct of examination by an educational institution. The court noted that the exemption for renting of immovable property was only applicable until 01.04.2013, after which it was withdrawn by subsequent amendments. Issue 4: Maintainability of the Writ Petition Due to Limitation The court noted that the writ petition was filed after the statutory period of limitation had expired. Citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. M/s. Glaxo Smith Kline Consumer Health Care Limited, the court held that it could not entertain the writ petition as it was filed beyond the maximum limitation period prescribed under the Act. Conclusion: The writ petition was dismissed on all counts except for the exemption related to renting of immovable property for the period between 01.07.2012 and 01.03.2013. The petitioner was granted liberty to file a statutory appeal before the first Appellate Authority within thirty days, with the condition to pre-deposit the service tax demanded, except for the exempted period. The Appellate Authority was directed to await the decision of the Division Bench in the appeal pending against the decision of the learned Single Judge in a similar case. No costs were awarded, and connected miscellaneous petitions were closed.
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