TMI Blog2010 (8) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority has dropped the proceedings initiated against the respondents for the calculation of service tax dues under the Heading Commercial Training or Coaching Service . 2. The relevant facts that arise for consideration are that the intelligence was gathered by the Officers of Headquarters Preventive Unit of Thiruvananthapuram Commissionerate, revealed that the respondents have been providing commercial or coaching for various courses/entrance examinations/computer courses and had not been fully discharging their service tax liability and filing the periodical returns since April 2004. The officers conducted investigation called for the records from the respondents and recovered various statements. On the completion of the investigation, it was noticed by the authorities that the respondent has been imparting training for the courses like B.Com, M.Com, MBA, BSC-IT, BCA, MCA and were also conducting courses for Engineering/Medical Entrance Exams, Off campus study of IGNOU, Manipal, Bharathiar Universities etc., Certified Computer courses like CCNA, MCPC and other courses. On reasonable belief that the respondent is liable to pay service tax on the fees collected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are imparting only coaching to private students appearing for various university examinations as a parallel college. The coaching given by the respondent for competitive examinations and entrance tests are not related to the coaching given by them for private students appearing for university examinations and they cannot be treated on an equal footing with a regular college claiming that they are imparting education . The term 'College' means a degree or diploma awarding educational institution. The entrance examination coaching is given to science stream students studying in higher secondary schools and those students are not pursuing any course in the respondent's institution as a regular student and it is purely within the ambit of 'Commercial Coaching or Training Service'. Therefore the service rendered by the respondent in the area of competitive examinations/entrance coaching etc. will not attract para 2.2.3 of the Board's Circular referred above. (iii) It is also pertinent to mention here that the case of Malappuram District Parallel College Association v. Union of India reported in 2006-TIOL-35-HC-KERALA-S.T. = 2006 (2) S.T.R. 321 (Ker.), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case. It is his submission that the respondents are considered as a parallel college. It is his submission that if they are considered as a parallel college, then all the benefits which are accorded to a regular college could be available to them. He would submit that the judgment of the High Court of Kerala in the case of Mallapuram District Parallel College Association v. UOI - 2006 (2) S.T.R. 321 (Ker.) and in the case of St. Antony's Educational Charitable Society v. UOI - 2006 (1) S.T.R. 137 (Ker.) will squarely cover the issue as regards the applicability of Service Tax provisions for the parallel colleges. It is his submission that the Circulars issued by the Department are binding on the department as has been settled by the Hon'ble Supreme Court in the case of CCE v. Dhiren Chemicals - 2002 (139) E.L.T. 3 (S.C.). It is also his submission that the entire demand is barred by limitation as they have been filing the S.T.-3 Returns and there was a dispute as to the applicability of the CBEC Circular dated 20-6-2003. 5. We have considered the submissions made at length by both sides and perused the records. The issue to be decided in this case is whether the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be considered with reference to Art. 14 of the Constitution of India. As already stated students studying in the parallel colleges are students who are entitled to write the University examinations as private students. The curriculam prescribed for the examination and the degree certificate awarded to private students and students studying in regular colleges, whether aided or self-financed affiliated to University, are the same. Therefore there is no distinction between the two classes of students namely, the students studying in the colleges affiliated to Universities and private students who take coaching in parallel colleges to write the same examinations. While the students studying in affiliated colleges cannot be subjected to service tax along with tuition fees and other fees levied by the management of those colleges students, who are studying in parallel colleges will have to bear the service tax as an additional burden along with tuition fees and other charges collected by the management of parallel colleges. The main reason why many students cannot join regular colleges affiliated to Universities is economical. Further on account of limited number of seats availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, because, the burden of service tax on the parallel colleges will have to be borne by the students, and the validity of charging section has to be tested against Art. 14 of the Constitution with reference to its effect on the beneficiaries, that is the students. In view of the findings above, I find no distinction between students undergoing private study in parallel colleges and those undergoing study in affiliated colleges whether aided or self-financed in the same subjects for writing the same examinations. Therefore levy of service tax for services rendered by parallel colleges which indirectly falls on the students, but by simultaneously providing exemption to regular affiliated colleges allowing the students therein study free of tax is patently discriminatory and violative of the Art. 14 of the Constitution of India. Though the service tax is in the Union list, since education happens to be in the concurrent list and considering the encouraging policy of the State Government to improve the educational opportunities of the students in the State, wherefrom large number of educated people migrate outside the State and outside the country seeking employment, the view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld also be covered under the service tax and the charges, including the postal charges collected for rendering this service would be subjected to service tax. Whether service tax is leviable on institutes providing commercial coaching in addition to recognized degree courses : Some institutes like colleges, apart from imparting education for obtaining recognized degrees/diploma/certificates, also impart training for competitive examinations, various entrance tests etc. It is clarified that by definition, such institutes or establishments, which issue a certificate, diploma or degree recognized by law, are outside the purview of commercial training or coaching institute . Thus, even if such institutes or establishments provide training for competitive examinations etc., such services rendered would be outside the scope of service tax. 5.5 It can be seen from the above reproduced paragraph that the colleges apart from imparting education for obtaining recognized degrees/diploma/certificates, also impart training for competitive examinations, such institutes or establishments are outside the purview of Commercial Training or Coaching Institute . If the regular colleges affiliat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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