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TMI Blog2017 (10) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... r lessons is not on the sports and the education is not related to preschool coaching and training also the establishment does not issue certificate, diploma, degree or any educational qualification which was recognized by law, the training or coaching provided by the appellants do not fall under the exclusion category of the definition therefore squarely covered under the definition of commercial training or coaching centre. Identical issue decided in the case of M/s GREAT LAKES INSTITUTE OF MANAGEMENT LTD & OTHS Versus CST, CHENNAI & OTHS [2013 (10) TMI 433 - CESTAT NEW DELHI - LB], where it was held that except training or coaching falling in the exclusion category of all training or coaching falls under the definition of commercial training or coaching service, hence the same is taxable - the demand confirmed by the lower authority on merit is sustained. Extended period of limitation - Held that: - the appellants have suppressed the fact as well as contravened the provisions of this Chapter of the Act or of the Rules made under with intent to evade payment of service tax therefore the extended period was rightly invoked. Quantification of demand - various deductions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Estate Urban Infrastructure Management, Infrastructure Finance, Development Management, Quantity Surveying Health Safety Environment Management; that they also conducted two years post graduate, one year graduate and six months certificate programmes by way of distance education by correspondence; that apart from the above, NICMAR also conducted in service training programmes, either at NICMAR campus or on-site at the customer's site, which were of short duration and designed as per requirement of the customers: that they also carried out consultancy work which were more of research and problem based for various industries; that for conducting various programmes, NICMAR received consideration from students and issued them receipts; that they also provided hostel facility to the students along with mess facility which was optional for which separate receipts were prepared; that for in service programmes/research consultancy NICMAR raised bills/invoices on the customers on which service tax amount was also charged from the customers; that after completion of the courses/programmes, NICMAR issued certificates duly signed by the Dean (Post Graduate Programme), Director G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was confirmed demand of service tax, interest, fees and penalties under Section 77 78 was also imposed. Being aggrieved by both the orders-in-original, the appellants filed present appeals. 4. Shri L. Badrinarayan, Ld. Counsel appearing on behalf of the appellants made the following submissions on behalf of the M/s. National Institute of Construction Management Research (NICMAR). i) Service tax was levied only on training or coaching and not education The levy under Commercial training or coaching is levied on training or coaching provided by a Commercial Training or Coaching Centre. The Appellants are imparting education and hence will not be covered under the definition of Commercial Coaching or Training Centre. ii) The Appellants are a vocational training institute, thus are eligible to the exemption under Notification No. 9/2003-S.T., dated 20-6-2003. Even if the Appellants is regarded as a Commercial Coaching or Training Centre, they would satisfy the definition of a Vocational Training Institute and are eligible to the exemption under Notification No. 9/2003-S.T., dated 20-6-2003. The courses provided by the appellants also conveys th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters Services'. This itself implies that the said matter is subject to interpretation of Law. e. In Shri Chaitanya Educational Committee Vs. CC,I ST, 2016 (41) STR 241 (Tri. Bang.) as there was difference of opinion between both the member of the Bench with regards to invocation of extended period, the matter was referred to third bench, who set aside the invocation of extended period. In the said matter, extended period was set aside even when one of the center of the company was not discharging service tax whereas other was discharging service tax liability. However, the facts of the present matter is at better footing and hence extended period cannot be invoked. The submission on behalf of M/s. MIT Institute of Design (MAEER)- i) Service tax was levied only on training or coaching and not education The levy under Commercial training or coaching is levied on training or coaching provided by a Commercial Training or Coaching Centre. The Appellants are imparting education and hence will not be covered under the definition of Commercial Coaching or Training Centre. ii) The Appellant is part of MAEER. MAEER is conducting many courses w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the course. Further, many of the students of the Appellant also take up self-employment after the completion of their course. iv) T he demand in dispute should be computed on inclusive basis. The consideration received by the Appellant towards the coaching and training services should be considered to be cum service tax price. That means the consideration received should be considered to be including the value of applicable service tax and said service tax amount should be appropriately excluded while computing the demand in dispute. The impugned order is bad in law to the extent it has not considered the amount of course fees to be cum service tax and hence is liable to be set aside to this extent. v) Quantification of demand is incorrect The service tax if any could be demanded from the Appellant would be only after adjusting the CENVAT Credit of service tax paid by the Appellant in terms of the provisions of CENVAT Credit Rules, 2004 on the various input services received by the Appellant. The quantification of service tax demand needs to be adjusted based on the following as well: a. The value of Taxable Services have been comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said matter is subject to interpretation of Law. e. In Shri Chaitanya Educational Committee Vs. CC,I ST, 2016 (41) STR 241 (Tri. Bang.) as there was difference of opinion between both the member of the Bench with regards to invocation of extended period, the matter was referred to third bench, who set aside the invocation of extended period. In the said matter, extended period was set aside even when one of the center of the company was not discharging service tax whereas other was discharging service tax liability. However, the facts of the present matter is at better footing and hence extended period cannot be invoked. (vii) As it has been discussed in the preceding para's that the Appellant is not liable to pay service tax, the Appellant cannot be subjected to penalty under section 76, 77 or 78 of the Finance Act, 1994. (viii) In light of the above submission, the appeal should be allowed with consequential relief . 5. Ms. P. Vinitha Sekhar, Ld. Jt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. She made the following submissions on behalf of M/s. National Institute of Construction Manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his was despite the fact that CBEC had clarified the nature of the service by the year 2010. They cannot claim ignorance of law or confusion in the law because even before initiation of the investigations, clarity was brought in the classification and the same was no longer a debatable issue. The SCN was issued in 2012 by which time the retrospective amendment was already in place. If NICMAR had bonafide belief, they would have on their own come forward and paid the dues immediately after the clarifications were brought in. They didn t even seek a clarification from department. The very fact that NICMAR failed to come forward either to intimate the department or pay the applicable service tax clearly establishes that they had clear intentions to evade duty. They had also short paid duty in respect of Technical Consultancy service and in-house training in which case they were charging and collecting service tax. (para 5.4 of SCN, page 774 of the Appeal book]. This case is clearly distinguishable from the cases cited by the appellant as in this case the element of confusion was no longer there as it existed in other cases. Therefore, demand should be upheld for the extended period. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are imparting commercial training and coaching in the field of design and maintaining separate accounts, preparing a separate Balance-Sheet and is a separate legal entity. Each of the colleges/institutes of MAEER is separate institute or service providers for the purpose of levy of service tax and hence MIT would be the service provider and not MAEER. The Amendment brought in 2011 talks about recognized and non-recognized courses provided by an institute and not by the many institutes under a society or a trust. The Adjudicating Authority has clearly held in her finding why Amendment brought in 2011 is not applicable in their case. Para 18.5 of O-I-O (page 286 of appeal book). 3.6 The contention of MIT that the design courses offered by them are in collaboration with recognized foreign university holds no good as this aspect has been clarified by the CBEC vide its circular no 107/01/2009 ST dated 28.01.2009 para 3.8. 3.7. The Contention of MIT that they are offering Vocational Training is totally misplaced. Reliance is placed on CBEC circular no 107/01/2009 ST dated 28.01.2009, Circular no.59/8/2003 dated 20.06.2003 and Notification no.3/2010-ST dated 27.02.2010.Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , with or without issuance of a certificate and includes coaching or tutorial classes but does not include preschool coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being on merit . From the plain reading of the above definition it can be seen that all the commercial training or coaching for imparting skill or knowledge or lessons on any subject or field are covered under commercial training or coaching centre. The exclusion is provided from the ambit of this service with regard to sports activity and preschool coaching and training centre or any institute or establishment which issued any certificate, diploma, degree of any educational qualification recognized by law for the time being in force. As per the facts of the present cases, the service of both the appellants are squarely covered in the first limb of definition. Since imparting of skill knowledge or lessons is not on the sports and the education is not related to preschool coaching and training also the establishment does not issue certificate, diploma, degree or any educational qualificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se was detected only on the independent investigation carried out by the departmental officer. The adjudicating authority in both the cases have given detail findings on limitation which is reproduced below: Para 61 of OIO No. 21/PR.COMMR/ST-II/PK/2015-16 dt. 30.7.2016 in the case of M/s. National Institute of Construction Management Research 61. As regards the invocation of extended period of time, I observe that the law with regard to the tax liability of N1CMAR was crystal clear as soon as the Explanation to Sec 65 (105) (zzc) was inserted with retrospective effect, i.e., from 1-7-2003) with effect from 1-4-2010. Hence, I believe that NICMAR ought to have come forward on their own in April 2010 itself to discharge tax liability for the past period of one year for the FY 2009-10, if not for the past five year period from FY 2005-06 onwards in order to prove their bona fides without waiting for the Dept to arrive at their doorstep to demand tax. On the contrary, I observe that N1CMAR sought to avoid tax liability by indulging in hairsplitting in an attempt to cloak themselves in the garb of being (a) an educational institution recognized by law; (b) imparting vocational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etters to them they failed to provide details of their activities and the amount of fees/charges recovered by them. They ought to have got themselves registered with the Department and discharged the tax liability under the appropriate taxable categories as soon as the services rendered by them became taxable, which they have failed to do. This failure can be construed as deliberate contravention of the provisions of the Act and Rules with a clear intent to evade the payment of Service Tax. The nature of the activities were also not disclosed to the Department until the Department took up the investigation. Therefore, there is sufficient reason to invoke the proviso to Sub Section (1) of Section 73 of the said Act for demanding service tax for the extended period, For the said reason they are also liable to pay interest under Section 75 and penalty under section 78 of the Act for their failure to pay Service Tax. Even if they were disputing the tax liability, they were required to obtain registration and file periodical returns containing details of the feits/charges recovered from their students, but they failed to do so. They were aware of their statutory obligations, but deliber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Chapter of the Act or of the Rules made under with intent to evade payment of service tax therefore the extended period was rightly invoked. Hence we uphold the invocation of extended period in both the appeals. As regard challenge to the quantification of the demand in the case of M/s. MIT Institute of Design on account of various deductions such as certain amount was not received during the impugned period, certain fees, such as postal s, mess/sale of goods etc. needs to be excluded from the taxable value and also on account of cum tax value. On going through the finding in this regard in the order-in-original, we find that the adjudicating authority has rejected this claim of the appellant on the ground that the statement of details was submitted at the time of personal hearing which was not supported by any connecting bills/invoices/receipt, therefore the same was not verifiable. We are of the view that once the appellant made a claim in their defence for deduction of taxable value. It is incumbent on the Commissioner to consider it, non-consideration of the same is violation of the principles of natural justice. Therefore in our view the submission of the appellant challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X
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