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TMI Blog2009 (11) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... es Act, 1956 and are engaged in conducting Diploma course in Insurance leading to award of certificate of Post Graduate Diploma course in Insurance (IPGDI). Intelligence was gathered that the respondents were indulging in evasion of service tax by not registering themselves with the Central Excise Department and by not paying Service Tax on the fees collected by them for the course IPGDI under the category of Commercial Training and Coaching service. In this connection, the Deputy Commissioner, Service Tax issued a letter dated30-9-2005to the appellants to obtain a Service Tax Registration for providing taxable services under the category of Commercial Training and Coaching and calling for details of fees collected for providing such taxable services. The respondents informed that Insurance Regulatory and Development Authority (IRDA) was formed under the Govt. of India Act, 1999 and the IRDA is the controlling and governing body of all the insurance companies ofIndia. This is an independent body like Reserve Bank ofIndia, created by the Act of Parliament and IIRM was created as a joint venture of IRDA and Govt. of Andhra Pradesh. The respondents also claimed that there is not a Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed a penalty of Rs. 4,76,013/- under Section 78 of Finance Act, 1994. 2.1 Feeling aggrieved by such an Order-in-Original, the assessee filed an appeal before the learned Commissioner (Appeals). Learned Commissioner (Appeals) after considering the grounds of appeal and submissions made before him, set aside the impugned order on the ground that the assessee is not a profit making company and is not a commercial concern. Aggrieved by such an order, Revenue is in appeal before us. 3. The learned SDR would submit that the learned Commissioner (Appeals) has erred in setting aside the impugned Order-in-Original before him. It is the submission that Commercial Training or Coaching Service has been defined under Section 65(27) of the Finance Act, 1994, which included three components : (a) it applies to institutions or establishments (b) they are providing commercial training or coaching (c) it does not include institutes issuing certificate/educational qualification recognized by law 3.1 It is the submission that the definition covers any institute or establishment and the word Commercial Concern has not been used here and hence, the contention of the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial nature with a profit being the motive. It is the submission that the respondent is not a commercial concern due to the fact that the respondent is a company floated by the Insurance Regulatory and Development Authority of India (IRDA), a regulatory body constituted by Central Government, under an Act of Parliament and Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC), a fully owned undertaking of Government of Andhra Pradesh with an object of promoting and regulating professional organizations connected with insurance and re-insurance business . It is the submission that the main object of IIRM i.e. the respondent, is to run an education academy and to organize training courses and special programs to impart education, training in insurance, risk management and other financial areas to Indian/Foreign national involved in such business. He would also submit that respondent is a company registered under Section 25 of the Companies Act and hence, it is a non-profit organization. It is the submission that the Tribunal in an identical issue has considered all the points raised by the learned JDR and has held in favour of the assessee in the following cases : (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search in the areas of insurance, risk management, financial services and all related aspects thereto, in particular their relevance to Indian conditions and market. It is also mentioned that funds may be raised for carrying on its activities through fees, donations or gifts, government grants, subscriptions, membership fees, course fees and other modes of raising money including the sale of publications towards attainment of main objects. From the above it is clear that IIRM is not a commercial coaching or Training centre. The respondents have further contended that the courses offered by them are approved by IRDA, the certificate issued will be signed by the Chairman of IRDA and IIRM is a joint venture of IRDA and Govt. of Andhra Pradesh therefore, the courses conducted by them are recognized by the law of the land. The lower adjudicating authority has held that the Insurance degree/course is not on the same pedestal as an Engineering/Medical degree course; hence the same is not covered in the exclusion clause. I find no merit in lower adjudicating authority s findings. No where in the Service Tax Rules it is provided that the institution which is conducting the courses shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se surplus amounts earned have been transferred to campus infrastructure project fund of the appellants. This fund has grown to Rs. 2,55,00,000/-. We find that fair amounts of profit were earned by the appellants through its activities in the last three fiscal years. Mainly owing to this surplus, the Commissioner found that GLIM is engaged in Commercial Training or Coaching. He also observed that the status of the appellants as a commercial coaching or training centre or not is not relevant and the commercial nature of the coaching or training is critical in deciding the exigibility to tax of the activity engaged in by GLIM. We do not find ourselves in agreement with this finding. What is subject to tax is commercial training or coaching provided by a commercial training or coaching centre. We find that the certificates for MBA or PGPM issued to the students on successful completion of these courses are not recognized by law. Therefore, the appellant is not an establishment exempt from service tax for the reason that it issues a certificate or diploma or degree recognized by law. GLIM conducts courses in association with a couple of universities in theUSAandNanyang Technological ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and education are social services essential to provide minimum quality of life to the people of a country. As the demand for these services cannot be met by the Public Sector alone, private sector fills the gap. For most of them in the private sector, health education are lucrative business. However, we find that education in the instant case is not a business. The primary object of GLIM is to impart education. Profit making is not its main motive. The refrain of the several judicial authorities cited is that profit motive characterizes a commercial concern as against general public utility in the case of a charitable organization. Therefore GLIM is not a commercial concern and the training or coaching provided by GLIM is not a commercial activity. In the view we have taken of the issue on merits we do not consider it necessary to examine the question if the demand is time barred. In the circumstances, we set aside the impugned order and allow the appeal filed by M/s. Great Lakes Institute of Management. 6.3 The above said ratio has been followed by the Tribunal in all the cases as has been referred by the learned Counsel. 7. In view of these findings and respectfully follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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