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TMI Blog2018 (12) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... nt are in the nature of commercial training or coaching services and leviable service tax for the period in question. Other income shown in the balance-sheet for the year 2011-12 relating to various services on which Service Tax not paid invoking the extended period of limitation - Held that:- All the information available in the balance-sheet under the head 'other income' was available to the department and while issuing the second show-cause but no objection was raised by the Revenue. We find merit in the contention of the Ld. Advocate for the Appellant - invoking longer period of limitation confirming the demand of ₹ 3,88,762/-, on 'other income' is untenable in law, hence, set aside. Penalty u/s 78 - Held that:- Since the preset demand notices were issued as a continuation to the earlier notice invoking larger period of limitation and the present demand notices are for normal period of limitation, therefore, imposition of penalty under Section 78 cannot be sustained against the appellant - penalty u/s 78 set aside. However, penalty and interest imposed under the other provisions of the Finance Act, 1994 are hereby upheld. Appeal allowed in part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show-cause notice was issued to the appellant demanding Service Tax on commercial coaching and training services for the period from 1.4.2012 to 30.6.2012 and 01.7.2012 to 31.03.2013 amounting to ₹ 1,74,40,967/- and ₹ 22,29,914/- for the period April, 2011 to March, 2012 on other incomes. 2.1 On adjudication, the learned Commissioner reduced the total demand of Service Tax to ₹ 2,55,96,240/- and appropriated the amount already paid; besides, she imposed penalty of equal amount of ₹ 2,55,96,240/- under Section 78, ₹ 2,08,000/- under Section 77 (IA), ₹ 14,800/- under Section 77 (1C), late fee of ₹ 20,000/-per return under Section 70 of the Finance Act, 1994 pertaining to the period April, 2011 to March, 2012 totaling to Rs.l lakh. Hence, the present appeal. 3. Learned Advocate Shri V. Sridharan for the appellant submits that the appellant, a part of the MAEER, which owns 63 Institutes across Maharashtra possesses affiliation with the recognized universities, which are approved by All India Council for Technical Education (AICTE). The appellant through advertisement for admission, conduct tests and successful candidates in the test a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the laws of the respective foreign countries. In support, he has referred to the judgment of this Tribunal in the case of ITM International Pvt. Ltd. Vs. CST, Delhi - 2017 (7) GSTL 448 (T). 3.1 Assailing the confirmation of demand on 'other income', the learned Sr. Advocate has submitted that the same is erroneous, mis-interpretation of the particular taxable entry under which it is confirmed and also in some cases beyond the scope of the show-cause notice, hence bad in law. 3.2 On the issue of penalty, the learned Sr. Advocate has submitted that extended period of limitation cannot be invoked in the present case as there were confusion on the applicability of Service Tax. In support, he has referred to the judgments in the case of I2IT Pvt. Ltd. Vs. Commissioner of Central Excise 2014 (34) STR 214 (Tri-Mum), Jaiprakash Industries Ltd. Vs. Commissioner of Central Excise - 2002 (146) ELT 481 (SC)' Harpar Pharmaceuticals (P) Ltd. Vs. Commissioner of Central Excise - 2006 (194) ELT 65 (T), Mentha Allied Products Ltd. Vs. Commissioner of Central Excise - 2004 (167) ELT 494 (SC) and Continental Foundation Jt. Venture Vs. Commissioner of Central Excise, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that exemption notification No. 33/2011-Service Tax dated 25.4.2011 should not be applicable to the appellant's case since the diploma certificate issued in the course relating to design is not recognized in law. He has further submitted that accepting their tax liability the appellant had discharged Service Tax w.e.f. 1.7.2012 and has also not disputed the same in the present appeal. In the present case, the adjudicating authority while computing the demand extended the benefit of cum duty value for the relevant period and also while considering the elements comprising of other income in computing the demand, reduced the same from ₹ 22.29 lakhs to ₹ 3.88 lakhs. It is his contention that demand of Service Tax on other income alleging the suppression of facts is justified since the details of other income referred to in the balance-sheet for the year 2011-12 could not be considered in the first show-cause notice as the information furnished by the appellant to calculate statements of demand based on the previous show-cause notice, was not furnished. He submits that the demands issued on 07.1.2013 31.10.2013 relating to commercial coaching and training services con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined under Section 65 (27) of the Finance Act, 1994 and reads as follows:- Commercial Training or Coaching Centre means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include pm school 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 appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial training or coaching, in their ST-3 Returns also not informed to the department otherwise. The appellant also did not make any effort to seek any clarification on such a important legal aspect. Therefore there is a clear suppression of fact on the part of the appellant. The present case 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 NICMAR 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that they have neither taken registration under the Act or Rules, nor have they filed any ST-3 returns and not discharged the service tax liability. It was only after the Department took up the survey, did the facts about rendering the impugned service come to light. Despite repeated letters 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 failur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand of Service Tax. Therefore the proviso to Section 73(1) is rightly invokable for the entire period. Hence the tax liability for the entire period is upheld. From the above detailed findings, it is seen 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. 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 veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount has been confirmed invoking larger period of limitation. Needless to emphasize, that all these charges, as 'other income' are undisputedly reflected in their balance sheet for the respective years. The appellant was earlier visited with a show-cause notice invoking larger period of limitation concerning the period 2006 to 2011 in relation to levy of tax on commercial coaching or training services. Thereafter, the demand notice was issued to the appellant, after collecting necessary information relating to the value of the taxable services i.e. commercial coaching or training services rendered. In the third show-cause notice, the allegation of non payment of service tax on 'other income' has been alleged and demand notice was issued invoking extended period of limitation. It is the argument of the learned Advocate for the appellant that all the information available in the balance-sheet under the head 'other income' was available to the department and while issuing the second show-cause but no objection was raised by the Revenue. We find merit in the contention of the Ld. Advocate for the Appellant. Therefore, invoking longer period of limitation con ..... 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