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2019 (4) TMI 183 - AT - Service Tax
Courses offered by IIM (IIMA) - Commercial Training or Coaching Services - demand of service tax on long duration courses - demand on the ground that long duration courses are not approved by AICTE - issuance of second SCN - Extended period of limitation - Circular No. 86/4/2006 dated 01.11.2006 - validity of SCN - Held that:- Till the introduction of Finance Act 2010 by which explanation was inserted in sub clause zzc of Section 65 (105) of the Finance Act, the term ‘Commercial Coaching of Training Centre’ was deemed to have included only those centres which were rendering the service with profit motive as clarified vide Circular No. 86/4/2006-dated 01.11.2006 (S) - However with enactment of the Finance Act, 2011 the clause (27) of Section 65 of the Finance Act, the term ‘Commercial Training or Coaching Centre’ would cover all trainings centers giving training for a consideration irrespective of the profit motive of the center. This change was given retrospective effect from 01.07.2003.
It is seen that in the notice, the only ground raised is that the long term 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 affirmed by the letter of TRU dated 14.02.2017 - the long term course of IIM are courses recognized by law. In view of that the demand does not survive on merits.
Time Limitation - Held that:- There was not suppression and mis-declaration by the appellant. There was not malafide intention whatsoever, thus barred of the demand would also be liable to be set aside on account of limitation.
Appeal allowed - decided in favor of appellant.