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TMI Blog2018 (5) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions or evidence, if any, in support of their case. Penalties - Held that: - there is no gainsaying that the entire issue has arisen due to bonafide belief of the appellants that being a national institute set up by the Government their activities would not be exigible to service tax - no malafide or devious intent can be ascribed to the appellant for failure to discharge tax liability in respect of the above services to the extent applicable - penalties set aside. Appeal disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... kill, the service tax becomes exempt. Thus the amounts charged from participants for imparting such training are exempt from service tax. Therefore liability proposed in the show cause notice would not be sustainable. (iii) The service tax for Mandap Keeper service would only be payable. The appellants would pay the payable tax. (iv) In respect of other subsequent appeals, service tax would become payable for vocational training also since by notification No.3/2010 S.T. dated 27-2-2010 there is a change in the definitions. By this amendment only such courses that are recognised by National Council for vocational training would stand exempted. (v) Therefore for the subsequent periods as detailed in each appeal, service tax would become payable for all IT programmes and other short term courses as these are not recognized. The appellants would discharge the payable service tax liability. (vi) However, the appellants have been making pre-deposits as ordered. In the context of the fact that the service tax is not payable on grants-in-aid as explained in the individual appeals and in view of settled legal provision, the amounts deposited are more than the amounts of service tax actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Training offering such notified courses under Apprentices Act 1968. Under Mandap Keeper Service, during the period an amount of ₹ 1,61,98,233/-was collected. The tax payable on this amounts to ₹ 19,82,864/-. While this is so, an amount of ₹ 15 lakhs was paid as pre-deposit under Section 35F of the Act. II. APPEAL No.ST/3254/2012 [Arising out of OIO No.11/2012 dated 17-7-2012 passed by the Commissioner of Customs and Central Excise Hyderabad-II Commissionerate, Hyderabad) Sl. No. Service Tax demanded under Period in dispute Amount of Service Tax Demanded Penalty/ Interest 1 Commercial Training or Coaching Services 2009-10 Rs.72,77,251/-U/S 73 (1) of the Finance Act, 1944 i.Rs.10,000/-u/s.77 of the Finance Act, 1994 ii. ₹ 200/-or 2% per month till payment is made u/s.76 iii. Interest u/s.75 of the Finance Act, 1994. 2 Mandap Keeper Services 2009-10 Rs.4,80,631/-U/S 73 (2) of the Finance Act, 1944 3 Renting of Immovable Property 2009-10 Rs.23,644/- SCN No.177/2010, dt.20.10.2010 As per SCN the period is 2009-10, the amount of ₹ 7,13,04,445/-received towards grants is not leviable to tax in respect of commercial training ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,62,268/-received is taxable. The tax is ₹ 1,19,714/-. A total amount of tax payable in respect of two show cause not ices relating to this appeal is ₹ 28,81,666/-. The total deposit under sec.35F was ₹ 30 lakhs. IV. APPEAL No.ST/30831/2016 [Arising out of OIO No. HYD-SVTAX-000-COM-112-15-16 dated 31-3-2016 passed by the Commissioner of Service Tax, Service Tax Commissionerate, Hyderabad) Sl.No. Service Tax demanded under Period in dispute Amount of Service Tax Demanded Penalty/Interest 1 Commercial Training or Coaching Services 2012-2013 Rs.4,15,33,508/-u/s.73(1) of the Finance Act, 1944 i.Rs.41,53,308/-u/s.76 of the Finance Act, 1944 ii. ₹ 10,000/-u/s 77 of the Finance Act, 1944 iii. Interest u/s.75 of the Finance Act, 1994. 2 Mandap Keeper Services SCN OR No.96/2014 dt.23.05.2014 The notice covers the period 2012-13. The grants of a total amount of ₹ 31,61,07,099/-received are not taxable. The other amounts which are fees collected from participants is ₹ 1,92,94,322/-which alone is taxable to an amount of ₹ 23,84,778/-. The amounts received from Mandap Keeper services is ₹ 6,26,768/-. The tax payable is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 12,40,736/-. The pre-deposit made was ₹ 53,79,000/-. The excess in balance is ₹ 41,38,264/-. Taki ng into account the aggregate amounts leviable to tax in all the six appeals and the deposits made, it is submitted that the Institute is required to pay only a further amount of ₹ 21,65,134/-. The appellant institute is also required to pay the required interest as may be calculated by the authorities. 3. On the other hand, Ld. A.Rs Shri Balasubramanian and Shri Arunkumar, on behalf of Revenue, support the impugned orders. They submit that the adjudicating authorities have gone into each issue in detail; that the activities carried out by the appellants have been found to be correctly falling under 'Commercial Training or Coaching Service', 'Management Consultancy Service', 'Mandap Keeper Ser vices' and 'Renting of Immovable Property Service', in line with the statutory provisions as in force during the relevant periods of dispute. 4. Heard both sides. We find some merit in the plea of the appellants that in respect of "Commercial Training or Coaching Services" carried out by them, the amount received from grants-in-aid is not taxable. The appellants have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other sections of the society, the governments concerned paid grants-in-aid to the assessee. This payment was often made in instalments, each instalment having been paid upon production of utilization certificate by the assessee. The assessee did not pay service tax on these amounts, while they paid service tax on the consideration received from non-government agencies for advice, consulting or technical assistance rendered to them, such payments of tax being under the head "consulting engineer's service." The department wanted to levy service tax on the grants-in-aid received by the assessee from the government for implementation of the latter's welfare schemes under the head "scientific or technical consultancy" under Section 65(105) (za) of the Finance Act, 1994 read with Section 65(92) of the Act. This taxable service was introduced with effect from 16-7-2001 and defined as "service provided or to be provided to a client by a scientist or technocrat or any science or technology institution or organization in relation to scientific or technical consultancy." This definition of the taxable service covers the period of dispute in this case. Section 65(92), as this provision s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as clearly held by this Bench in the case of Administrative Staff college of India (supra). An organization rendering "scientific or technical consultancy" service under Section 65(105) (za) of the Finance Act 1994 must be a science or technology institution. The assessee-company has not been shown to be such an institution. Moreover, the revenue has failed to show that any scientific or technical advice or consultancy or assistance was rendered by the assessee to the governments. Many of the activities in question, such as micro-enterprises development, training programmes, project planning, infrastructure planning etc., are apparently in the nature of projects involving application of social science principles. The revenue has not shown that any techniques or principles of pure and applied sciences were applied in the implementation of the governmental schemes by the assessee. In the case of Administrative Staff College of India (supra), this Bench held that, as the research activities of the assessee (Administrative Staff College) were related to social science, they would not be within the ambit of "scientific or technical consultancy" and hence no service tax could be levied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings, the adjudicating authority should take into account the observations supra as also the appellants contentions made in paras (2.1 & 2.2) on this issue. Appellants should be given suitable opportunities to present their case in a personal hearing and should also be permitted to submit additional submissions or evidence, if any, in support of their case. The appeals in respect of the dispute on tax liability on commercial coaching and training services thus are allowed by way of remand on above terms. 6. Appellants have conceded tax liability in respect of Mandap Keeper services, Management Consultancy Services and Renting of Immovable Property Services. Accordingly, the amount of tax liability with interest confirmed and demanded by the adjudicating authorities in the impugned orders are sustained. In consequence, the appeals filed by the appellants in respect of these services are dismissed as not pressed. 7. Coming to the issue of penalties, there is no gainsaying that the entire issue has arisen due to bonafide belief of the appellants that being a national institute set up by the Government their activities would not be exigible to service tax. We are also of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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