2025 (4) TMI 313 - AT - Service Tax

Classification of service - appellant providing services in the nature of yoga and yoga classes - classificable under Commercial Training or Coaching Services or not - scope of services under the Negative List regime - exemption under N/N. 25/2012-ST dated 20.06.2012 - invocation of extended period of limitation - penalty - HELD THAT - Recently this Tribunal in the case of Patanjali Yogpeeth Trust Vs. CCE Meerut-I 2013 (8) TMI 804 - CESTAT NEW DELHI in more or less similar circumstances where the appellant therein was also engaged in the activities of provided services relating to health and fitness by way of teaching yoga and meditation and failed to discharge service tax analysing the definition and referring to an earlier judgment of Delhi Bench of this Tribunal reported as Patanjali Yogpeeth Trust Vs. CCE Meerut-I which is also relied upon by the learned Commissioner in the impugned order. It is observed by the Tribunal that The phrase Yoga and Meditation have been specifically mentioned in the definition of health and fitness service as defined under Section 65 (51) of the Finance Act 1994. The claim of the appellant that they are providing treatment for specific ailments being suffered by the person is not supported by any positive evidence. Instructions on Yoga and Meditation in these camps are not imparted to individual but to the entire gathering together. No prescriptions are made for any individual in writing diagnosing and treating the specific ailment/ complaint of any individual. There are no reason not to follow the said judgment of the Tribunal which has been upheld by the Hon ble Supreme Court. Consequently the conclusion of the learned Commissioner that the services which are in the nature of yoga rendered by the appellant fall under the taxable category of health and fitness service during the period October 2008 to June 2012 agreed upon. Leviability of service tax on TTC and ATTC and also Vastu Shastra - HELD THAT - There is no valid reason not to accept the said reasoning of the Commissioner as no contrary evidence has been placed on record to buttress their claim that the courses viz. TTC ATTC and Vastu Shastra offered by the appellant do not fall under the category of Commercial Training or Coaching Centre Service . Levy of service tax under the Negative List w.e.f. 01.07.2012 - HELD THAT - The learned Commissioner in the impugned order has not disputed that the appellant are a charitable trust registered under Section 12AA of the Income Tax Act 1961; hence the services of the yoga provided by them covered under the said Notification which has been given effect from 01.07.2012 to 20.10.2015 the demand confirmed therefore not sustainable. Extended period of limitation - HELD THAT - This Tribunal in Patanjali Yogpeeth Trust s case the facts of which is more or less similar to the present one upheld the invocation of extended period of limitation after analysing and following the principles of law on the subject. Conclusion - i) Service tax on the activity of yoga for the period October 2008 to 30.06.2012 under the category of health and fitness service yoga courses of TTC ATTC and Vastu Shastra under Commercial Training and Coaching services is liable to be paid; however the exact amount of demand applicable interest and penalty to be computed for the said period after taking note of the receipts not connected with the said activities as claimed by the appellant. ii) Levy of service tax for the period 01.07.2012 to 31.03.2014 be examined in the light of the 11C Notification No.42/2016-ST dated 26.09.2016. Appeal disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The primary legal issues considered in this judgment are:

• Whether the activities of the appellant, specifically yoga and yoga classes during the period October 2008 to June 2012, are classifiable under the taxable category of "health club and fitness centre service" and whether Teacher Training Course (TTC) and Advanced Teacher Training Courses (ATTC) provided by the appellant during the same period attract service tax under the category of "Commercial Training or Coaching Services".
• Whether the yoga services and TTC and ATTC on Yoga provided for the period 01.07.2012 to 31.03.2014 are considered as 'services' under the Negative List regime and not exempted under Notification No.25/2012-ST dated 20.06.2012.
• Whether the extended period of limitation is invocable in appeal No.ST/20533/2015 and whether a penalty is imposable.

2. ISSUE-WISE DETAILED ANALYSIS

i. Classification of Yoga and Related Services (October 2008 to June 2012)

• Relevant Legal Framework and Precedents: The definition of 'health and fitness service' under Section 65(52) of the Finance Act, 1994, includes yoga. The Tribunal referenced the case of Patanjali Yogpeeth Trust Vs. CCE, Meerut, which classified yoga as a taxable service under this category.
• Court's Interpretation and Reasoning: The Tribunal agreed with the Commissioner's interpretation that yoga, as specified in the definition, falls under 'health club and fitness centre service'. The appellant's argument that their activities were charitable and spiritual was rejected as the definition was clear and exhaustive.
• Key Evidence and Findings: The Tribunal found that the appellant conducted various yoga programs and collected fees, which were not exempt from service tax.
• Application of Law to Facts: The Tribunal concluded that the appellant's activities were taxable under the specified category for the period in question.
• Treatment of Competing Arguments: The appellant's reliance on a circular from 2002 was dismissed as irrelevant to the period after the introduction of 'Commercial Training or Coaching Services' in 2003.
• Conclusions: The services related to yoga were taxable under the 'health and fitness service' category.

ii. Commercial Training or Coaching Services (October 2008 to June 2012)

• Relevant Legal Framework and Precedents: Sections 65(26), 65(27), and 65(105)(zzc) of the Finance Act, 1994, define 'Commercial Training or Coaching Services' and include services provided for a consideration, regardless of profit motive, as taxable.
• Court's Interpretation and Reasoning: The Tribunal upheld the Commissioner's view that the appellant's TTC and ATTC courses fell under 'Commercial Training or Coaching Services' as they were provided for a consideration.
• Key Evidence and Findings: The appellant's courses were not recognized by law for exemption, and fees were collected from trainees.
• Application of Law to Facts: The Tribunal found the appellant liable for service tax under this category.
• Treatment of Competing Arguments: The appellant's claim of exemption based on government recognition was dismissed due to lack of evidence.
• Conclusions: The Tribunal confirmed the tax liability for the courses under the specified category.

iii. Service Tax under the Negative List (01.07.2012 to 31.03.2014)

• Relevant Legal Framework and Precedents: Notification No.25/2012-ST and subsequent Notification No.42/2016-ST exempted certain services, including yoga, from service tax under specific conditions.
• Court's Interpretation and Reasoning: The Tribunal acknowledged the applicability of Notification No.42/2016-ST to exempt yoga services for the specified period.
• Key Evidence and Findings: The appellant was registered under Section 12AA of the Income Tax Act, qualifying them for the exemption.
• Application of Law to Facts: The Tribunal remanded the matter to the adjudicating authority to verify the applicability of the exemption notification.
• Treatment of Competing Arguments: The appellant's claim for exemption was accepted pending verification of compliance with notification conditions.
• Conclusions: The case was remanded for further examination of the exemption applicability.

iv. Extended Period of Limitation and Penalty

• Relevant Legal Framework and Precedents: The invocation of the extended period of limitation under Section 73 of the Finance Act, 1994, requires evidence of suppression or willful misstatement.
• Court's Interpretation and Reasoning: The Tribunal upheld the Commissioner's decision to invoke the extended period due to the appellant's failure to disclose material facts and register for service tax.
• Key Evidence and Findings: The appellant did not voluntarily disclose their taxable activities, justifying the extended period.
• Application of Law to Facts: The Tribunal confirmed the applicability of the extended period for the demand.
• Treatment of Competing Arguments: The appellant's argument against suppression was rejected based on established legal principles.
• Conclusions: The extended period of limitation was upheld, and the penalty was deemed appropriate.

3. SIGNIFICANT HOLDINGS

• Core Principles Established: The Tribunal affirmed that yoga services fall under 'health and fitness service' for taxation purposes, and TTC and ATTC courses are taxable under 'Commercial Training or Coaching Services'. The exemption for yoga services under the Negative List regime requires compliance with specific notifications.
• Final Determinations on Each Issue: The Tribunal upheld the tax liability for the period October 2008 to June 2012 and remanded the case for further examination of exemption applicability for the period 01.07.2012 to 31.03.2014. The extended period of limitation and penalty were confirmed.