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TMI Blog2009 (3) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... of ‘commercial training or coaching centre’ – service tax liability not arises - ST/194/2008 - 642/2009 - Dated:- 16-3-2009 - S/Shri T.K. Jayaraman, Member (T) and M.V Ravindran, Member (J) Shri G. Shiva Dass, Advocate, for the Appellant. Shri S.K. Choudhary, Special Counsel, for the Respondent. [Order per : T.K. Jayaraman, Member (T) (Oral)]. - This appeal has been filed against Order-in-Original No. 1/2008 dated 27-2-2008 passed by the Commissioner of Central Excise, Hyderabad-IV Commissionerate. 2. The details of the appeal are given below in the tabular column. Date of Show Cause Notice 27-9-2006 17-9-2007 Total Period Covered 1-7-2003 to 31-3-2006 1-4-2006 to 31-3-2007 OIO/Date No. 01/2008 dated 27-2-2008 Service Tax Rs. 12,24,85,459/- including Education Cess under Commercial Training or Coaching Service Rs. 9,57,42,539/- including Education Cess Under Commercial Training or Coaching Service Rs. 21,82,27,998/- Penalty Rs. 5,00,000 u/s 76 of the Act Rs. 1,00,00,000/-u/s 76 of the Act. Rs. 1,05,00,000/- 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 'commercial coaching or training service' has come up for consideration by this Tribunal in respect of various organizations. The Tribunal after considering all the points raised by the parties, has decided in favour of the assessees in the following cases. * M/s. Magnus Society Hyderabad v . CC CE, Hydercthad - 2009 (13) S.T.R. 509 (Tribunal - Bang.) = 2008-TIOL-1812-CESTAT-Bang. * M/s. ASCI v. CCE, Hyderabad - 2009 (14) S.T.R. 341 (Tribunal) = 2008-TIOL-2007-CESTAT-Bang. * M/s. C-DAC v. CC CE (Appeals-II), Hyderabad - 2009 (14) S.TR. 165 (Tribunal - Bang.) = 2008-TIOL-2011-CESTAT-Bang. * M/s. ICFAI v. CCE, Hyderabad - 2009 (14) S.T.R. 220 (Tribunal) = 2008-TIOL-2036-CESTAT-Bang. * M/s. Great Lakes Institute of Management Ltd. v. CST, Chennai - 2008 (10) S.T.R. 202 (Tribunal) = 2009-TIOL-134-CESTAT-MAD. * Ahmedabad Management Association v. CST, Ahmedabad - 2009 (14) S.T.R. 171 (Tribunal - Ahmd.) = 2009-TIOL-214-CESTAT-AHM. 5.2 Our attention was drawn to the statutory provisions under Section 65 (26), Section 65(27), Section 105 (zzc) relating to Commercial training or coaching. 5.3 Our attention was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial services (iii) Courier Agency (iv) Credit rating agency (v) Drycleaner agency (vi) Goods transport agency (vii) Manpower recruitment agency (viii) Photography studio or agency (ix) Programmer producer (x) Security agency (xi) Sound recording studio or agency (xii) Convention services (xiii) Online information and data-base access or retrieval (xiv) Business Auxiliary Services (xv) Commercial or industrial construction services However, such a deletion has not been effected in respect of "commercial training or coaching" or "commercial training or coaching centre". Therefore, it is clear that the term commercial has to be accorded specific significance while interpreting Section 65(26) and 65(27). The term commercial has been used in reference to 'coaching and training centre' as a person or as an institution and not with reference to coaching or training as an activity. An activity cannot be commercial in itself. The intention of the persons undertaking those activities has to be commercial. 5.5 The appellant is not a commercial concern. 'Commercial concern' has been interpreted in the following decisions. (a) Board of Control for Cricket ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arning process. Training is practical guidance given for developing skills in order to do a particular job or activity. However, education is the process of overall development of a person. It includes moral intellectual and physical development of a child or a person. It is not restricted to a particular subject and it covers various subjects and areas. 5.10 It was stated that the appellants are an educational institution established for the purpose of imparting education as is evident from their brochure as well that recognition to the courses offered by the appellants by various universities like Wharton and Kelloggs. They have entered into an MOU with these universities to bring the world class education to the students of Indian Universities. Even if it is assumed that the courses are not recognized by law, as submitted below, still they qualify as education, even if non-formal in nature. Merely, due to the lack of recognition, the process of education will not cease to be education' and will definitely not become coaching or training. 5.11 The show cause notice has sought to invoke the extended period of limitation on the ground that the appellants have misrepresented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the revenue took us through the definition of "Commercial Training or Coaching Centre" in terms of the Finance Act and argued that any institute or establishment providing commercial training or coaching, knowledge or lessons on any subject should be considered under this category. He stated that the specific requisites for levy under this category are: * The training or coaching must be provided by an institute or establishment on commercial basis; * Such training or coaching is provided for imparting skill or knowledge or lessons on any subject or field excluding sports; * The commercial training or coaching is provided with or without issuance of a certificate, and * Services connected with pre-school coaching and institutes conferring recognized certificates or any educational qualification recognized by law are excluded. The said definition makes it abundantly clear that once an institute or establishment satisfies the definition of 'commercial training or coaching centre', they would be liable to pay Service Tax on the taxable services as defined in the Act. The use of words "any institute or establishment" in the definition is very significant clearly refle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt observed as under: "…………..so long as there is no constitutional bar against levy of service tax on education, and statute stands the test of Art.14 of the Constitution, then the levy has to be fully upheld, no matter whether the court considers the levy unwise, improper or even a regressive measure which is a policy matter to be left to the wisdom of the legislature. Therefore, the argument of the petitioner that levy of tax on education is against the spirit of Constitution and against the directive principles is only to be rejected and I do so.' This decision was relied on to urge their point that the contention of the appellant that education cannot be subjected to Service Tax, is not sustainable. 7. We have gone through the records of the case carefully. The Commissioner in the impugned order has given his findings from paragraph 25 to 36. In paragraph 37, he has given the details of his orders. After going through the facts of the case, the Commissioner has come to the conclusion that the appellants do impart commercial training or coaching and they would be falling within the category of the taxable service of "commercial training or coaching". Throughout his order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. In fact in Circular of 2006, the Board has clarified in the context of applicability of Service Tax on IITs and IIMs under Manpower Recruitment or Supply Agency Service stating that a commercial concern is an institution that is primarily engaged in commercial activities having profit as primary aim. It was stated that the principal activity of the institutions like IITs or IIMs is to impart education without objecting of making profits and they cannot be called as 'commercial concern'. Similarly, in the present case also; the institution is actually a non-profit company. The primary aim of the appellant is only management education research, etc., and it does not appear to be that the primary aim is profit. These factors are very relevant for deciding the issue. We are of the firm view that a higher institute imparting education in management by no stretch of imagination be called a commercial training or coaching institute. 7.2 We do not state that it is not proper to tax under the Service Tax category management education, etc., that is not our concern. As it stands, the Tribunal has to interpret the law. When we go strictly by the definition of "commercial training or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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