2010 (5) TMI 233 - AT - Service Tax

Commercial Training and Coaching Services- Stay- The appellant is a Trust established under a Trust Deed dated 29-5-2001 and registered as a Charitable Trust with the Charity Commissioner under the provisions of the Bombay Public Trusts Act.

Summary

Issues:
- Application for waiver of pre-deposit and stay of recovery in relation to service tax and penalty.
- Interpretation of the definition of 'commercial training or coaching centre' under Section 65(27) of the Finance Act, 1994.
- Conflict between Tribunal's decision and Board's circular regarding the levy of service tax on educational institutions.
- Prima facie case for waiver of pre-deposit and stay of recovery.

Analysis:
1. The appellant, a Trust registered under the Bombay Public Trusts Act, sought waiver and stay regarding service tax and penalty amounting to over Rs. 4 crores. The issue revolved around whether the Institute run by the Trust should be considered a charitable institute exempt from the definition of 'commercial training or coaching centre' under Section 65(27) of the Finance Act. The appellant argued that the activity did not fall under the purview of 'commercial training or coaching centre' based on the Trust Deed's provisions. The appellant relied on previous Tribunal decisions like Great Lakes Institute and Ahmedabad Management Association to support their claim.

2. The JCDR contended that the levy of service tax depends on the nature of the activity, not solely on the character of the institution. Referring to Board's circular No. 107/01/2009-S.T., the JCDR argued that if an institution engages in commercial activities like providing coaching or training for a fee, it qualifies as a 'commercial training or coaching centre' under Section 65(105)(zzc). The JCDR highlighted a pending Supreme Court challenge against a Tribunal decision similar to the ones cited by the appellant.

3. The Tribunal analyzed previous decisions like Great Lakes Institute and Ahmedabad Management Association, where it was established that institutions not engaged in commercial activities were exempt from service tax. The Tribunal noted the importance of Tribunal decisions over Board circulars in case of conflict. Despite the Commissioner's reliance on the Board's circular, the Tribunal found a prima facie case in favor of the appellant. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery, scheduling detailed arguments for an early appeal hearing on 22-7-2010.