TMI Blog2014 (9) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant would merit classification under “commercial training or coaching” as defined in the Finance Act, 1994. - Decided against the assessee. Extended period of limitation - Held that:- Mere failure to register with the department and pay service tax, by itself can not amount to suppression unless the same was with an intent to evade payment of tax. There is no evidence led by the Revenue to that effect either in the show cause notice or in the Impugned order. Therefore, the demand is sustainable only for the normal period of limitation. - Decided in favor of assessee. Valuation - inclusion of mess charges, hostel charges and payment for the laptops supplied to the students - Held that:- Mess charges and hostel fees are for providing boarding and lodging to the students and cannot be attributed to the training or coaching rendered. Similarly, the amount recovered for the supply of laptops also cannot be attributed to the services rendered (it relates to supply of goods) and therefore, these amounts collected towards mess charges, hostel charges and laptops are excludible from the taxable value of the service rendered - Decided in favor of assessee. Levy of penalty - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eto along with interest there on under Section 75 ibid and also proposing to impose penalties under Sections 76, 77 78 of the said Finance Act. The said notice was adjudicated by the ld. Commissioner, who found that the courses offered by the appellants were not recognized by law during the impugned period and therefore, the activity undertaken by them are liable to be classified as Commercial Training or Coaching and they are liable to pay service tax on the consideration received for the said courses. It was further held that they did not inform the department of the activities undertaken by them nor did they get registered with the department or file any returns and therefore, they suppressed the information about their operations from the department and accordingly, extended period of time of five years could be invoked for confirmation of service tax demand. Accordingly, the ld. Commissioner confirmed the service tax demand of ₹ 1,71,42,174/- along with interest thereon and also imposed an equivalent amount of penalty under Section 78. However, no penalty under Sections 76 77 of the Finance Act, was imposed on the appellant. It is against this order, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded. Thus the law relating to levy of service tax differentiates an educational body from a commercial training or coaching centre and therefore, if the services are rendered by an educational body, the service tax levy is not attracted. The ld. Counsel also refers to TRU letter DOF No. 334/1/2007, dated 23-2-2007 wherein the above points have been clarified in the context of renting of immovable property. Similar clarifications have been given in respect of rent-a-cab service vide letter dated 28-2-2007 and in respect of tour operator service vide letter dated 29-2-2008. Thus, the Board itself has differentiated between an educational body and a commercial training or coaching centre. If the definition of Commercial Training or Coaching Centre is analyzed in the context of the above clarifications, there will be three categories - (i) a Centre that imparts skill or knowledge or lessons on any subject or field which are in the nature of pure coaching or training (ii) a Centre that imparts skill or knowledge or lessons or any subject or field which is in the nature of pure coaching or training and also in the nature of education and (iii) a Centre that imparts skill or knowle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includible in the taxable value of the service as they are not considerations for the service rendered. In the light of the above, the ld. Counsel prays for allowing of the appeal. 4. The ld. Additional Commissioner (AR) appearing for the Revenue on the other hand strongly refuted the contentions raised by the appellant. He relies on the decision of this Tribunal in the case of The Institute of Chartered Financial Analysis of India (ICFAI), Hyderabad, The ICFAI University, Dehradun, The ICFAIAN Foundation, Hyderabad, The ICFAI University, Tripura, wherein similar circumstances the service tax demand has been confirmed. Similarly, in respect of courses conducted by the Indian School of Business, Hyderabad, the demand of service tax for the normal period has been sustained. Since, the appellants are on the same footing as in the case decided by the Tribunal, the appeal has no merits and is liable to be dismissed. 4.1 It is further submitted that in the earlier orders in the above mentioned cases, this Tribunal had upheld the contention of the appellant and the same were challenged by the Revenue before the Hon ble Apex Court and the Hon ble Apex Court set aside the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation. - For the removal of doubts, it is hereby declared that the expression commercial training or coaching centre occurring in this sub-clause and in clauses (26), (27) and (90a) shall include any centre or institute, 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 organization 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. 5.3 From the retrospective amendment cited above, it is clear that any centre or institute, by whatever name called, where training or coaching is imparted for a consideration is liable to service tax. There Is no dispute in the present case that the appellant herein is charging for the so called under graduate or post graduate courses conducted by them and they are operating their business in a commercial manner. It is also an accepted fact that the courses conducted by the appellant are not recognized by law. 5.4 The view taken by this Tribunal in the case of ICFAI [2009 (14) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 65(27) of the Finance Act, 1994 (as this provision stood during the period of dispute) in respect of the fees/charges collected by them from the students who underwent various courses offered by the assessees during the period of dispute. 13. The above issue has got to be examined on the facts of these cases in the light of the explanation added by the Finance Act, 2010 to Section 65(105)(zzc) of the Finance Act, 1994 with retrospective effect from 1-7-2003. As per this explanation, the expression commercial training or coaching centre appearing in Section 65(26) and (27) of the Finance Act, 1994 shall include - - any centre or institute, by whatever name called, - where training or coaching is imparted for consideration, with or without profit motive, - whether or not such centre or institute is registered as a trust or a society or similar other organization under any law for the time being in force. Certain aspects which, before the above amendment, were material to consideration of the question whether a given centre or institute would fit in the definition of commercial training or coaching centre under Section 65(27) and whether it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hades of meaning of education . According to one meaning appearing in MAJOR LAW LEXICON, education means the act or process of imparting or acquiring particular knowledge or skills and it is the result produced by instruction, training or study. (This meaning is seen culled out from Padmanav Dehury v. State of Orissa [AIR 1999 Orissa 99].) WHARTON S LAW LEXICON quotes Swamy Vivekananda : The end of all education, all training, should be man-making. The end and aim of all training is to make the man grow. The training by which the current and expression of will are brought under control and become fruitful is called education. As rightly submitted by the learned Special Consultant, education can be seen as the result of study, instruction, training, coaching etc. and the websites of at least two ICFAI varsities have been shown to acknowledge this. Therefore a line cannot be drawn to separate education from. training or coaching . It is also pertinent to note that Section 65(27) as it stood during the period of dispute excludes institutes/establishments which issue any certificate or diploma or degree or any educational qualification recognized by law for the time being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. As regards other assessees, it has not been established that the degrees/certificates/diplomas issued by them to their students during the relevant period were recognized by law. Acceptance of any such degree/certificate/diploma by any varsity or other institution abroad cannot mean recognition thereof by Indian law. Thus a conspectus of facts presented to us would clearly disclose the real character of the assessees activity training or coaching for a consideration. 16. It was argued by be learned counsel that the ICFAI Universities, Dehradun and Tripura, were established under the respective State Acts and recognized by the UGC and should ipso facto be considered to be establishments authorized to issue certificates, degrees etc. Though it is true that these universities were, by UGC s notification, included in the list of private/self-financed universities under Section 2(f) of the UGC Act, there is no evidence of any of them having issued any certificate, diploma, degree or other educational qualification to the students from whom they collected fees and other charges during the period of dispute. It was not even shown that these so-ailed universities were authorized, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e correctness of the decision and the permissible course then often is to refer the question or the case to a larger Bench. This is the minimum discipline and decorum to be maintained by judicial fraternity . Since the facts/issues involved are identical in the cases decided by the Bangalore bench and the case before us, the decision of the co-ordinate bench at Bangalore is binding on us and therefore, we cannot take a contrary view. 5.6 The decision of the Hon ble Delhi High Court, Delhi in the case of Delhi Music Society v. Director General of Income Tax was in the context of interpretation of Section 10(23C)(vi) of the Income Tax Act and the question for consideration was whether dissemination of music education is akin to imparting of education and in that context it was held that the same would amount to imparting of education and the music society would be an educational institution for the purpose of the said Section 10(23C). The issue before us is different and has to be decided as per the definitions given in the Finance Act, 1994 which deals with the levy of service tax and therefore, the above decision in the case of Delhi Music Society is of no relevance to the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question is whether the appellant could have entertained a bona fide belief that they were not liable to pay service tax during the impugned period. In all the decisions of this Tribunal on the above matter, whether it be the Great Lakes Institute of Management case, ICFAI case and the ISB case, the view taken was that the activity would not come within the purview of commercial training or coaching . Though these decisions have now been set aside by the Hon ble Apex Court, it is evident that the general perception prevalent was that only those institutions which prepared students for competitive examinations were liable to pay service tax under the category of commercial training or coaching. Though the said perception might be wrong, nevertheless it could have been entertained bona fide. It is not necessary that a bona fide belief should be right or correct but it is the entertainment of the belief that should be right. Therefore, the claim of the appellant that they were under the bona fide belief that they were not liable to pay service tax is plausible and possible. The activity undertaken by the appellant was liable to service tax or not was a debatable issue during the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviding boarding and lodging to the students and cannot be attributed to the training or coaching rendered. Similarly, the amount recovered for the supply of laptops also cannot be attributed to the services rendered (it relates to supply of goods) and therefore, these amounts collected towards mess charges, hostel charges and laptops are excludible from the taxable value of the service rendered and we hold accordingly. Since the appellant has not collected any service tax from the service recipients, the entire consideration received will have to be treated as cum-tax and the amounts received will have to be apportioned between the taxable value and service tax and we hold accordingly. 8. Since we have held that there is no suppression on the part of the appellant, penalty under Section 78 of the Finance Act, 1994 also does not sustain and accordingly we set aside the same. 9. To sum up, we are of the considered view that the service rendered by the appellant falls within the purview of commercial coaching or training service as defined in Sections 65(26), 65(27) and 65(105)(zzc) of the Finance Act, 1994 and they are liable to pay service tax on the said activity within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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