2024 (10) TMI 569 - AT - Service Tax

Levy of service tax - Commercial Training or Coaching Centre - appellant is a learning centre in Sikkim and Manipal and engaged in providing various educational students programmers conducted by Sikkim Manipal University under Distance Education Programme as approved by UGC - period April, 2009 to October, 2013 - invocation of extended period of limitation - HELD THAT - Considering the facts that on identical facts, another institute was also imparting education to the students through distance education programme approved by the University Grant Commission (UGC). In the case of ACADEMY FOR PROFESSIONAL EXCELLENCE VERSUS COMMR. OF CGST EX., HOWRAH 2019 (10) TMI 1328 - CESTAT KOLKATA , this Tribunal has held ' We find that the Sikkim Manipal University is a recognised university under UGC and is certainly not doing any business activity but providing education services and these facts are not in dispute. The similar services carried on the appellant, being identical services to that of the university, cannot by any stretch of imagination be classified under support services of business when the service provided by the University is not a business activity itself. We agree with the contentions raised by the appellant that the parallel institutes imparting degree courses recognised by law are clearly excluded from the service category of Commercial Training or Coaching Centre ' Thus, as the Sikkim Manipal University is a recognized University under UGC and is not doing any business activity, but providing education services and these facts are not in dispute. Therefore, the service provided by the University is not the business activity itself and is not liable to service tax under Commercial Training or Coaching Centre services. The appellant is not liable to pay under the category of Commercial Training or Coaching Centre services. Accordingly, the demand against the appellant is not sustainable. Consequently, no penalty is imposable on the appellant. The impugned order is set aside - appeal allowed.

Summary

Issues:
1. Confirmation of demand of service tax under the category of "Commercial Training or Coaching Centre" for the period April 2009 to October 2013.
2. Applicability of service tax on educational services provided by a learning center approved by UGC.
3. Interpretation of whether educational services can be classified under "Support Services of Business and Commerce" for taxation purposes.

Analysis:
The judgment by the Appellate Tribunal CESTAT KOLKATA involved an appeal against a demand of service tax under the category of "Commercial Training or Coaching Centre" for the period April 2009 to October 2013 amounting to Rs.1,66,01,169/- along with interest and penalties under the Finance Act, 1994. The appellant, a learning center in Sikkim and Manipal, provided educational programs approved by UGC through Distance Education Programme. The proceedings were initiated based on a show-cause notice, and the demand was confirmed after adjudication, leading to the appellant's appeal.

During the proceedings, the appellant cited previous tribunal decisions to support their case, specifically referencing cases such as Academy For Professional Excellence Vs. Commissioner of CGST & Excise, and Asian School of Media Studies Vs. Commissioner of Central Goods & Services Tax, among others. The appellant argued that educational services provided by a recognized university under UGC, like Sikkim Manipal University, should not be classified as a business activity subject to service tax under the category of "Commercial Training or Coaching Centre."

The Appellate Tribunal, considering the precedents and the nature of services provided by the appellant akin to those of a recognized university, held that educational services cannot be categorized as "Support Services of Business and Commerce" for taxation purposes. It was emphasized that services provided by educational institutions approved by UGC do not constitute business activities and are not liable to service tax under the specific category mentioned. As a result, the demand against the appellant was deemed unsustainable, leading to the setting aside of the impugned order and allowing the appeal with no penalty imposed on the appellant.