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TMI Blog2008 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... organisation and is an association of professional members and organizers including trade and industries. The objective of the association is to educate the members of the human society and to bring the awareness in them in day-to-day affairs of the mankind and to fulfil these objects it undertakes lecture meetings on various subjects, management development programmes, diploma education programmes etc. The association has filed appeal against the order of the Commissioner confirming demand of service tax treating the various training programmes conducted by them as commercial training or coaching service, demand for service tax on the membership fees and other amounts collected from the members treating the same as club or association service and service tax on various seminars and meetings held by them treating them as convention service. An amount of Rs. 65,70,162 has been demanded being the service tax on commercial training service, Rs. 1,91,233 on club/association service and Rs. 71,710 on convention service for the period from 1-7-2003 to 31-3-2006, 16-6-2005 to 31-3-2006 and 1-4-2003 to 31-3-2004 respectively. Penalties also have been imposed under section 75A, 76, 77 and 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the exclusion clause which excludes services provided by a club or association, engaged in any activity having objectives which are in the nature of public service and which are of a charitable religious or political nature. He submits that AMA is actually an association of members but not a club. In common parlance club is an association which provides various recreational facilities and advantages and the definition is made to cover such associations and not the ones like AMA. Further he also submits that the clubs invariably have a profit motto and AMA does not have any profit motto. He also submits that activities of the association are covered by the expression public services which is excluded from the taxable services. Convention services 2.3 Convention services became taxable with effect from 16-6-2001 and up to 1-5-2006 the service was liable to tax only when provided by any commercial concern and therefore arguments advanced by him about the nature of association being not of commercial concern are applicable and therefore AMA cannot be taxed for convention services prior to 1-1-2006 which is the period of dispute at present. He also drew our attention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining or coaching provided should be coming in the category of the service and liable to tax an institute/establishment must be providing it purely on commercial basis. She has held that in this case the service is provided purely on commercial basis since they are charging fees from the trainees and participants and the training programmes/courses organized by them are not leading to a certificate recognized by law. She has also held that the very fact that the fees charged is much more than expenses also shows that the training provided is on commercial basis. She has also observed that on a scrutiny of their balance sheet for 3 years, it was found that the association has reported huge amounts as income in excess over expenditure which again supports the view that the services provided, are commercial in nature and association is earning profits from such services. She also relied upon the circular issued by the Board, vide No. 84/2/2006-ST. dated 19-9-2006 wherein the Board had clarified that merely because an organization has been treated as charitable trust, for the purpose of levy of service tax it need not have to be plainly treated the charitable trust but has to be exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner in her order, it can be seen that all the points which have been mentioned in the appeal memorandum by the appellants argued by the ld. Advocate have been discussed and findings have been recorded against each of the points. Therefore what we are required to do is to see which argument is acceptable and legally correct. 4.5 As regards the issue as to whether AMA can be considered to be a commercial concern which is the most important point and which would decide the taxability of two services viz commercial training and coaching services and conventional service, the appellants have relied upon the decision of the Tribunal in the cases of Great Lakes Institute of Management Ltd. v. CST [2008]12 STT 296 (Chennai-CESTAT) (GLIML s case) and Institute of Chartered Financial Analysis of India v. CC CE [2008] 17 STT 501 (Bang.-CESTAT) (ICFAI's case). In both these cases, the issue before the Tribunal was liability of management programmes conducted by the organizers to service tax. Further in terms of income also, we can see that there is a similarity between the appellants in the two decisions cited by the ld. Advocate and the present case. The appellants i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgments cited are applicable but when it comes to the type of training programme, the training programmes conducted by the AMA do not lead to any degree. The Commissioner has taken the view that the Circular No. 86/4/2006-ST. dated 1-11-2006, issued by CBEC wherein it was clarified that institutes like IITs and IIMs are not liable to pay service tax prior to 1-5-2006 under the category of manpower recruitment of supply services in view of the fact that in the case of manpower recruitment or supply agency service, commercial concern was a pre-condition for taxability whereas in this case in view of the words "any institute or establishment", commercial concern is not a pre-condition. This appears to be the correct interpretation. Further she has also considered the definition of 'charity and charitable trust' which also, we have to accept that it does not cover AMA by a strict sense of the term. 4.8 In the case of GLIML (supra), the Tribunal had taken a view that the programme conducted by them is actually classifiable as 'education' and not in the category of commercial training or coaching and therefore even though the certificates for MBA/PGPM issued to the students on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, Dehradun as University; another UGC Notification dated 1-11-2006 recognizing ICFAI, Tripura as University and also the Notifications of the State Governments. We have also seen the records relating to the Registration of Society, Income-tax exemptions. The Indira Gandhi National Open University's recognition is available. We have gone through the Certificate issued by the ICFAI, University; ICFAI University is a consortium of Universities. Each University is recognized by the respective State Government. In terms of section 2(f) of the UGC Act also, the Universities are either recognized, notified as University either by Centre or State. The State Governments are competent to declare an institution as University. In certain case, certain institutes of higher learning are given the status of Deemed Universities. We have also gone through the course brochures. The brochures indicate a very broad imparting of education and not mere training or coaching in a particular field. The Commissioner and also the Special Counsel have stressed the point that there is not much difference between education and coaching or training. We do not agree. Education is a very broad term. Education is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The answer is no in view of the following "(i) AMA is not a commercial concern. (ii) The purpose of the training is not commercial (iii) The objective of the AMA in conducting the programme is not commercial and whatever extra income is earned, it is flowed back into the association and is used for public purpose. (iv) The programmes conducted by the AMA can be considered as continuing education programmes and not as commercial training or coaching. (v) No specific skills which prepare candidates for a particular job or an examination are imparted. (vi) The diploma programmes/courses conducted by AMA amount to education or continuing education and not commercial training or coaching." 4.11 The next point that has to be decided is whether the AMA is liable to pay service tax on the membership fee received from the members of the club. Ld. Commissioner has held that AMA is providing various services to the members such as Training programmes, seminars, meetings etc. On the other hand the id. Advocate has contended that unlike a club or an association which provides recreational facilities and other services to the members, AMA does not provide any specific service. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charitable' as 'dedicated to the general public purpose, usually for the benefit of needy people who cannot pay for the benefits received'. In view of the above, she takes the view that the AMA cannot claim exclusion under this category. While the Commissioner has discussed these details in detail, however, we feel that we need not go into the issue at all in view of the fact that revenue has not shown what are the services or advantages which the members received as a result of making subscription or paying any other amount to AMA. There has to be a quid pro quo between the members and the association/club as per the definition. To our mind this has to be established before levying service tax on the fees or subscription or any other amount received by any association. In view of this position, we hold that no case has been made out for charging service tax on the amounts received from the members/member institutions/trade etc., by the association. 4.13 As regards convention services, the service tax is leviable only if it is rendered by a commercial concern prior to 1-5-2006. The demand in this case relates to the period prior to 1-5-2006. Since, we have already held that AMA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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