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TMI Blog2013 (8) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... the text of the explanation - the explanation to Section 65(105)(zzc) of the Act had very wide scope to encompass the activities of the assesses and render them exigible to service tax under Section 65(105)(zzc) of the Act. U.P.Gram Panchayat Adhikari Sangh & others v. Dayal Ram Saroj & others [2006 (12) TMI 446 - SUPREME COURT] - It was an inbuilt mechanism in the system itself - Judicial discipline demands that when the decision of a co-ordinate Bench of the same High Court was brought to the notice of the Bench, it was respected and is binding, subject of course to the right to take a different view or to doubt the correctness of the decision and the permissible course then often was to refer the question or the case to a larger Bench - This was the minimum discipline and decorum to be maintained by judicial fraternity. Time-barred Demand - Whether the demand was hit by time-bar – Held that:- Service tax demand shall be restricted to the normal period of limitation inasmuch as the assesse was under the bonafide belief that they are not liable to service tax and evidences on record also support this fact - There cannot be any suppression of facts on the parts of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax of Rs.3,58,38,984/- on a gross amount of consideration received of Rs.30,72,93,330/- during the period 01/10/2003 to 30/09/2008. The notice was adjudicated vide the impugned order and the demands were confirmed along with interest thereon. However, the adjudicating authority waived the penalties proposed in the show cause notice under Sections 76, 77 and 78 of the Finance Act, 1994. Aggrieved of the said order the appellant is before us. 3. The learned consultant for the appellant made the following submissions: 3.1 The appellant is not a commercial coaching or training centre as they are an organization promoted by the Reserve Bank of India and are working as a non-profit organization. Though training programmes are undertaken by the appellant, the certificates awarded by the appellant are not recognized under any law. Therefore the activity undertaken by the appellant cannot be considered as a commercial coaching or training'. In majority of the cases, training programmes are conducted for people who are already employed in various banks and the banks sponsor participants and in accordance with the requirements of the bank, the training programme is conceived and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax. If the training or coaching is imparted for a consideration, service tax levy is attracted. Only the coaching or training imparted which is recognized under law is excluded from the purview of service tax. In the appellant's case, it is an undisputed fact that the various training programmes organized by the appellant were not recognized by or under any law. Therefore, the activity undertaken by the appellant is leviable to service tax. He relies on the decision of this Tribunal, in the case of ICFAI, Hyderabad; ICFAI University, Dehradun, ICFAI Foundation, Hyderabad; ICFAI University, Tripura, Indian School of Business, Hyderabad where in similar circumstances, the demand of service tax was upheld vide order Nos. 514-520/2012 dated 31/07/2012 by the South Zonal Bench at Bangalore. The same ratio was followed by this Bench in I2IT Pvt. Ltd. vs. CCE, Mumbai in final order No. A/418/13/CSTB/C-I dated 11/03/2013. Accordingly he submits that the argument advanced by the appellant that they are not liable to service tax is not sustainable in law. 5. We have considered the submissions made by both the sides very carefully. 5.1 Sections 65(26) and 65 (27) of the Finance Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 2010 (17) STR 83 (Tri-Bang) was that imparting knowledge and conducting courses at higher level such as post graduate level cannot be termed as commercial training or coaching centre irrespective of whether the degrees so offered were recognized by law or not. In these cases, it was further held that since the institutions were registered under Societies Registration Act for educational purpose (in the case of ICFAI) and was a non-profit company (in the case of ISB), their activities could not be considered as "commercial". However, these decisions of the Tribunal were set aside by the hon'ble apex Court vide order dated 14/5/2010 in civil appeal No. 579 of 2010 (Commissioner Vs. ISB) and order dated 14/2/2011 in civil appeal nos. 4820-4823 of 2009 ( Commissioner Vs. ICFAI institutions). These cases were remanded back to the Tribunal for fresh consideration in the light of the newly inserted Explanation in section 65(105)(zzc) of Finance Act, 1994 by Finance Act, 2010, which was made effective from 1 st July, 2003. This decision of the apex court was in pursuance to the earlier decision of the hon'ble supreme court where a three judges bench of the Court allowed the appeal file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute is registered as a trust or a society or a similar organization under any law is immaterial now. The name of the centre or institute is immaterial. Whether the activity of the centre or institute is with or without profit motive is also immaterial. Upon the above amendment, what matter is whether the centre or institute has imparted training or coaching for a consideration. If it has done so, it will got covered by the definition of "commercial training or coaching centre" and its activity will get covered by the definition of "commercial training or coaching". The consideration for training or coaching per se determines the commercial character of the activity. To the same effect is the Budget instruction noted in para (5) of this order. What is reflected in the amendment seems to be a conceptual change with regard to the term "commercial" used in Section 65(26) and (27). The change of law, which is substantial, has come about with retrospective effect from 1/7/2003. We must now proceed to determine whether the ICFAI entities, the ISB, the BIFT and the IIRM had been imparting training or coaching to their students for a consideration during the respective periods of dispute. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lishments which issue certificates/diplomas/degrees/educational qualifications not recognized by law stand included in the definition of "commercial training or coaching centre" under Section 65(27) of the Act. Institutes and establishments issuing educational qualifications can certainly be called educational institutions. But the ICFAI entities before us were imparting lessons or skills or knowledge in various subjects to students by collecting fees and other charges but they did not issue to them any certificate, diploma, degree or other educational qualification recognized by law for the time being in force on account of which they were not covered by the exclusion clause of Section 65(27) and remained within the definition of "commercial training or coaching centre." Institutions which - - are established by, or under, or in accordance with, any law to impart education; - offer one or more courses of study with specific curriculum for each course and specific syllabus for each subject; - conduct examinations periodically and evaluate them; - organize extracurricular activities to develop skills in arts, sports etc; - create ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I the name of "ICFAI UNIVERSITY". We have already rejected this claim as untenable, given the fact that what was called ICFAI UNIVERSITY was a legally unrecognized consortium or conglomerate of the ICFAI societies and universities, with no legal sanction to issue such certificates, degrees etc. Therefore, none of the so-called universities can claim immunity to levy of service tax under Section 65(105)(zzc) of the Finance Act, 1994 on the ground of being covered by the exclusion clause of the definition of "commercial training or coaching centre" under Section 65(27) of the Act. 17. For the reasons already stated, we hold that the assesses were providing to their students "training or coaching" for a consideration and would ipso facto fall within the ambit of "commercial training or coaching centre" envisaged in the explanation to Section 65(105)(zzc) of the Finance Act, 1994. As this explanation has retrospective effect from 01/07/2003, the activities undertaken by all the assesses during the periods of dispute would get covered within the meaning of the phrase "training or coaching imparted for consideration" occurring in the text of the explanation. In other words, the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity undertaken by the appellant became taxable. In such circumstances, there cannot be any suppression of facts on the parts of the appellant and, therefore, the service tax demand has to be restricted to the normal period of limitation. In this case, since the notice had been issued on 06/04/2009, only the demand for the period October, 2007 to September, 2008 would fall within the normal period of limitation and, therefore, the demand of service tax has to be restricted to this period only. 8. As regards the claim of the appellant that they have charged a lumpsum amount including the charges for boarding and lodging and the same should be excluded while computing the tax liability merits consideration. However, it is for the appellant to lead evidence in this regard and substantiate their claim with regard to the amounts charged for boarding and loading expenses from the trainees. On submission of such evidences, the same shall be considered by the adjudicating authority and the demand quantified after giving abatement for the boarding and loading expenses. 9. To sum up: (a) We hold that the services rendered by the appellant is exigible to service tax under commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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