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TMI Blog2019 (4) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... rm course on which demand has been raised are not recognized by AICTE etc. The law does not provide for recognition by AICTE as a pre-condition of exemption from tax. The language is very clear. Prior to 01.05.2011, institutes providing training leading to qualification ‘recognized by law’ were outside the purview of tax. After 01.05.2011 ‘coaching and training’ leading to qualifications ‘recognized by law’ are exempted (upto 01.07.2012) and in the same fall under negative list thereafter. Thus the SCN is not sustainable as there is no allegation that the coaching or training provided by the appellant is not recognize by law. Non recognition by AICTE is not the same as non recognition by law. Recognition by law does not mean recognition by AICTE or AIU etc., but it means recognition by government in any significant manners. In the instant case, the courses under dispute have been recognized by government as equivalent to other degree/diploma courses for the purposes of employment and higher education. Moreover, Ministry of HRD has clearly laid down in their letter dated 31.01.2017 that recognition by AICTE or NBA accreditation is not required by IIMs. These facts have been affir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: Commercial training or coaching center means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any field other than sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include pre-school coaching and training center or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force. Ld. Counsel pointed out that definition of commercial training or coaching center originally excluded from its ambit any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force. Ld. Counsel argued that there is no requirement that the courses should be registered under AICTE as alleged in the SCN. He argued that so long as the institute conducts any courses which are recognized by any law , the said coaching institute would be outside the preview of Service Tax. 2.3 Ld. Counsel relied on the Circular No. 86/4/2006 dated 01.11.2006 wherein following has been clarified: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the gross amount received towards the service charges, irrespective of whether the venture is profit making, loss making or charity oriented in its motive or its outcome. The word Commercial used in the phrase is with reference to the activity of training or coaching and not to the nature or activity of the institute providing the training or coaching. Thus, services provided by all institutes or establishments, which fulfills the requirements of definition, are leviable to service tax. He pointed out that this is clearly a departure from the earlier stand where the word commercial appearing in the commercial training and coaching center was deemed to qualify the institute or center however in the Circular of 2009, the said stand was changed and the term Commercial appearing in the definition of commercial coaching and training center was deemed to qualify the nature of training. Ld. Counsel also relied on the decision of Tribunal in the case of Institute of Chartered Financial Analysis 2018 (17) STR 501 (CESTAT). 2.4 Subsequently by Finance Act 2010, the explanation was added with retrospective effect from 01.07.2003. The explanation read as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further pointed out that since IIM is not under UGC, therefore, the educational qualifications granted by them are called diplomas. Ld. Counsel relied on the decision of the Tribunal in the case of ITM International (P) Ltd. 2017 (7) GSTL 448 (Tri. Del.) He pointed out that the said decision was followed by Tribunal in the case of IILM Under graduate Business School reported in 2018 (10) GSTL 345. Ld. Counsel also has relied on the decision of Hon ble High Court of Delhi in the case of Indian Institute Aircraft Engineering 2013 (30) STR 689 (Del.). Ld. Counsel also relied on the clarification issued by CBEC vide Dof. No. 334/8/2016 Tru dated 29.02.2016. Ld. Counsel further pointed out that the Ministry of Education vide Office Memorandum dated 31.08.1966 has recognized the diploma granted by the appellant in following words: The Government of India have decided to recognize the post-graduate diploma in Business Administration awarded by the (i) Indian Institute of Management, Calcutta, and (ii) Indian Institute of Management, Ahmedabad, for purpose of recruitment to superior posts and services under the Central Government for which M.B.A. degree or equivalent diploma from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the powers of the national agency promoting the coordinated and integrated development of technical education in the country. In created autonomous bodies like the IITs, the NITs, the IIMs, the NITTRs, and the like and allotted huge funds to them. 2.8 Ld. Counsel also pointed out for the purpose of admission to higher studies, the PGDM course of IIM Ahmedabad has been approved by Association of Indian Universities since 03.04.1969. In support of this, he produced a copy of the relevant web page from the website. www.aiu.ac.in. 2.9 Ld. Counsel further pointed out that there are some calculation errors. Moreover he pointed out that they are also entitled to cum duty benefit for valuation of services. 2.10 On the issue of limitation, Ld. Counsel pointed out that earlier notices issued to them for short term courses were dropped. In the said decision, all the facts of instant case were examined. Since that notice was issued invoking extended period of limitation, the present SCN invoking extended period of limitation cannot be sustained in view of decision of Hon ble Apex Court in the case of Nigam Sugar Factory. He further pointed out that the issue involves interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itute, by whatever name called, where training or coaching is imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organisation under any law for the time being in force and carrying on its activity with or without profit motive and the expression commercial training or coaching shall be construed accordingly; It can be seen that the said explanation was inserted w.e.f. 01.07.2003. Vide Finance Act 2011, the following changes were made in clause 27 of Section 65. (3) in clause (27), the portion beginning with the words but does not include and ending with the words time being in force shall be omitted; Simultaneously Notification 33/2011-ST dated 25.04.2011, effective from 01.05.2011, was issued which reads as under: In exercise of the power conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government on being satisfied that it is necessary in the public interest so to do, hereby exempt,- (i) any pre-school coaching and training; (ii) any coaching or training leading to grant of a certificate or diploma or degree or any educational qualificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 with Finance Act, 2010. This amendment was given retrospective effect from 01.07.2003 by insertion of explanation in the sub clause zzc of Clause 105 of Section 65. 4.4 In summary as per legal provisions: (a) prior to 01.05.2011 all trainings given for a consideration by any person covered under the definition of commercial training or coaching center would be liable to service tax. Clause 27 of Section 65 of the Finance Act which define commercial training or coaching center excluded from its purview any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force . (b) From 01.05.2011 till introduction of the negative list with enactment of Finance Act 2012, the service tax was exempted on service provided by any institute or establishment resulting in grant of a certificate or diploma or degree or any educational qualification recognized by law for the time being. Thus, w.e.f. 01.05.2011 though such institutes or establishment qualified as commercial training or coaching center, Notification 33/11-ST dated 25.04.2011 exempted the coaching or training leading to grant of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat leading to grant of a qualification recognized by law they are paying service tax. 6. We find that revenue has argued that the letter dated 14.02.2017 of min of HRD does not retrospective recognition. A perusal of the language of the letter clearly shows that it is in the nature of a clarification. It clearly states the provisions of AICTE approval or NBA accreditation does not apply to IIMs. 6.1 Revenue has argued that no evidence has been produced letter dated 31.08.1966 is still valid. It is seen that no evidence has been produced by revenue to prove that the said recognition has been withdrawn. Subsequent communications with Ministry of HRD and with TRU indicate that there is no reason to doubt the letter dated 31.08.1966. 6.2 Ld. Counsel relied on the decision of Tribunal in the case of ITM International (P) Ltd. 2017 (7) GSTL 448 (Tri. Del.) In the said decision, Member (Judicial) had observed as follows: 12. What is the meaning of recognized by law? The said issue stands discussed by the Hon ble Delhi High Court in the case of Indian Institute of Aircraft Engineering v. Union of India [34 Taxmann.com 191 (Delhi HC) = 2013 (30) S.T.R. 689 (Del.)] where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in consultation with University concerned, be recognized by the Commission in accordance with the regulations made in this behalf under the Act. As such, it is seen that UGC Act does not state anything about recognition of courses or degrees/diplomas. AICTE only recommends technical curriculum and other criteria for technical courses to be offered by technical colleges. As such, the said circular of the Board is not at all applicable to the facts of the present case. The said views of Member (Judicial) were approved by Third Member in para 24 which reads as follows. 24. The next question is whether such a degree or diploma is recognized by law for the time being in force. Here, the reason discussed by Member (Judicial) is proper and sustainable. The UGC and AICTE, etc., are recognizing bodies of a University or an institution. The degree or diploma awarded by these institutions are being considered as recognized by law for the time being in force. In this connection, we note the position has been clarified regarding the scope of the term qualification recognized by any law will include such course as are approved or recognized by any entity established under a Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or recognition of such foreign qualification is needed to be issued. The Tribunal also noted that UGC had advised Indian students to ascertain information regarding equivalence of the degrees and diplomas awarded by accredited Universities abroad. While examining these facts, the Tribunal in the said case held that the course offered by appellants resulting in the issue of certificate by the University of London, which is treated as equivalent to degree or diploma issued by Universities in India, the appellant was held to be falling outside the scope of definition for Commercial Training or Coaching Centre . Ld. Counsel also has relied on the decision of Hon ble High Court of Delhi in case of Indian Institute Aircraft Engineering 2013 (30) STR 689 (Del.). In the case of Indian Institute of Aircraft Engineering (supra), Hon ble High Court has observed has follows: 23. The expression recognized by law is a very wide one. The legislature has not used the expression conferred by law or conferred by statute . Thus even if the certificate/degree/diploma/qualification is not the product of a statute but has approval of some kind in law , would be exempt. 24. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate issued by the Institutes as the petitioner cannot be withered away or ignored merely because the same does not automatically allow the holder of such qualification to certify the repair, maintenance or airworthiness of an aircraft and for which authorization a further examination to be conducted by the DGCA has to be passed/cleared. 6.3 Ld. Counsel also relied on the clarification issued by CBEC vide Dof. No. 334/8/2016-TRU dated 29.02.2016. In CBEC letter dated 29.02.2016 following has been observed: 7.14 Services provided by the Indian Institutes of Management (IIM) by way of 2 year full time Post Graduate Programme in Management(PGPM) (other than executive development programme), admissions to which are made through Common Admission Test conducted by IIMs, 5 year Integrated Programme in Management and Fellowship Programme in Management are being exempted from service tax. 7.15 It has been informed by Secretary, Ministry of Human Resource Development (MHRD) vide letter D. O. No. 2-14/2009-TS.V, dated 8th July, 2014 and 5th February, 2014 that MHRD is vested with the power to recognise educational courses [DoPT O.M. dated 8-1-1975], for the purpose of recrui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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