TMI Blog2018 (5) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... llants that being a national institute set up by the Government their activities would not be exigible to service tax - no malafide or devious intent can be ascribed to the appellant for failure to discharge tax liability in respect of the above services to the extent applicable - penalties set aside. Appeal disposed off. - ST/2103, 3254/2012, ST/28392/2013, ST/30831, 30832/2016, ST/30632/2017 - A/30447-30452/2018 - Dated:- 25-1-2018 - MR. M.V. RAVINDRAN, MEMBER (JUDICIAL) AND MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Mr. V.J. Sankaram, Advocate for the Appellant. Mr. N. Balasubramanyan Mr. Arunkumar, ARs for the Respondent Per: MADHU MOHAN DAMODHAR M/s. National Institute for Micro, Small and Medium Enterprises, herein after referred to as appellant or NIMSME) is an autonomous organization working under Ministry of Small Scale Industries, Government of India. It appeared that - (i) NIMSME were conducting various training and coaching programmes by charging fees, also offering coaching, issued certificates for Post Graduate Diplomas. Department took the view that these services provided by the appellant are services of commercial training or coachin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecomes exempt. Thus the amounts charged from participants for imparting such training are exempt from service tax. Therefore liability proposed in the show cause notice would not be sustainable. (iii) The service tax for Mandap Keeper service would only be payable. The appellants would pay the payable tax. (iv) In respect of other subsequent appeals, service tax would become payable for vocational training also since by notification No.3/2010 S.T. dated 27-2-2010 there is a change in the definitions. By this amendment only such courses that are recognised by National Council for vocational training would stand exempted. (v) Therefore for the subsequent periods as detailed in each appeal, service tax would become payable for all IT programmes and other short term courses as these are not recognized. The appellants would discharge the payable service tax liability. (vi) However, the appellants have been making pre-deposits as ordered. In the context of the fact that the service tax is not payable on grants-in-aid as explained in the individual appeals and in view of settled legal provision, the amounts deposited are more than the amounts of service tax actually payable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh not recognised is exempt. The amount of tax is ₹ 84,02,654/-. This amount is not leviable as tax owing to the precepts of notification. The benefit of notification 24/2004-CE, dt.10.09.2004 was no longer available from 27.02.2010 as by notification 3/2010-CE, dt.27.02.2010. The benefit of exemption was limited to courses affiliated to National Council for Vocation al Training offering such notified courses under Apprentices Act 1968. Under Mandap Keeper Service, during the period an amount of ₹ 1,61,98,233/-was collected. The tax payable on this amounts to ₹ 19,82,864/-. While this is so, an amount of ₹ 15 lakhs was paid as pre-deposit under Section 35F of the Act. II. APPEAL No.ST/3254/2012 [Arising out of OIO No.11/2012 dated 17-7-2012 passed by the Commissioner of Customs and Central Excise Hyderabad-II Commissionerate, Hyderabad) Sl. No. Service Tax demanded under Period in dispute Amount of Service Tax Demanded Penalty/ Interest 1 Commercial Training or Coaching Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-2011 2011-2012 Rs.6,639/- NIL SCN OR No.131/2011, dt.22.10.2011 and other notice OR No.47/2013 Adjn. (ST) Commr. Dt.23.04.2012 As per show cause notice dt.22.10.2011, the period is the year 2010-11. The amount received as grants is ₹ 18,60,89,539/-. This is not leviable to tax. Only the amount of ₹ 1,16,96,020/-collected from participants in other programmes is taxable. Tax payable is ₹ 12,04,690/-. There was also the service of renting of immovable property. The amount collected was ₹ 71,104/-and the tax payable is ₹ 7,324/-. Towards Mandap Keeper services the amount received is ₹ 19,15,194/-. The tax payable is Rs .1,97,265/-. The other show cause notice is OR No.47/2013, dt.23.4.2013 (Page 60-83). For the commercial training or coaching, the amounts received on grants amounting to ₹ 19,61,72,317/-are not taxable. Hence only the fees collected from participants in other programmes is taxable. The amount of tax payable is ₹ 13,52,673/-. Similarly for Mandap Keeper services the amount of ₹ 11,62,268/-received is taxable. The tax is ₹ 1,19,714/-. A total amount of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Dt.01.04.2015 The period impugned in the notice is 2013-2014. The total amount received as grants was ₹ 40,42,26,185/-. This amount is not taxable. The total fees collected from participants in other programmes is ₹ 1,50,74,042/-. The amount only is taxable to an amount of ₹ 18,63, 152/-. In addition the receipt from Mandap Keeper services is ₹ 10,75,234/-. The tax payable is ₹ 1,32,899/-. The pre-deposit is ₹ 38,97,000/-. There is an excess in balance to an extent of ₹ 19,00,949/-. VI. APPEAL No.ST/30632/2017 [Arising out of OIO No. HYD-SVTAX-000-COM-166-16-17 dated 12-1-2017 passed by the Commissioner of Service Tax, Service Tax Commissionerate, Hyderabad) Sl. No. Service Tax demanded under Period in dispute Amount of Service Tax Demanded Penalty/Interest 1 Commercial Training or Coaching Services 2014-2015 Rs.7,17,20,664/-u/s.73(1) of the Finance Act, 1944 i.Rs.71,72,066/-u/s.76 of the Finance Act, 1944. ii. ₹ 10,000/-u/s.77 of the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be no liability to service tax in respect of training programmes conducted on the basis of grants-in-aid received by the institutions set up by the Government for specific objectives. The Tribunal in the case of Apitco Ltd. Vs CST Hyderabad 2010 (20) STR 475 (Tri.-bang.) has set aside the demand of service tax holding that service tax is not leviable on the grants-in-aid received by the assessee from the Central and State Governments given as project implementing agency of the Government. The relevant portions of the Tribunal s order are extracted herein be low:- 3. The assessee, namely M/s. APITCO Ltd., is an organization promoted jointly by several financial institutions including the Andhra Pradesh State Industrial Development Corporation and nationalized and other banks. The assessee registered themselves as consulting engineers with the department as early as in 1997 for the purpose of payment of service tax. Ever since then, they have been paying service tax as consulting engineers on the amounts collected from their clients as a consideration for consulting engineer s service. During the period of dispute (2001-2002 to 2007-2008), they received grants-in-aid fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal consultancy service to the governments concerned. It is this view which made its way into the show-cause notices and the subsequent proceedings which culminated in the Commissioner s orders. ... .... ..... 6. We have given careful consideration to the submissions. It is not in dispute that the assessee-company had implemented welfare schemes for the Central and State governments for the benefit of the poor or otherwise vulnerable/weaker sections of the society and collected grants-in-aid from the governments concerned. It is not in dispute that these grants-in-aid had been totally utilized for implementing the welfare schemes. Nothing over and above these grants-in-aid was received by the assessee from any of the governments. In other words, the assessee did not receive any consideration for any service to the governments. Therefore, we hold that, in the implementation of the Governmental schemes, the assessee as implementing agency did not render any taxable service to the government. The department seems to be considering the Governments to be clients of APITCO. The question now is whether there was service provider-client relationship between the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e governments, during the period of dispute. The assessee has also made out a good case on the ground of limitation against a major part of the demand of duty raised in the first show-cause notice. As early as in January 2004, the assessee had furnished all the relevant facts to the department through a letter addressed to the jurisdictional Assistant Commissioner. Later on, in 2006, they stated all these facts once again in a letter addressed to the Superintendent of Service Tax. The show-cause notice in question was issued on 13-6-2006 invoking the first proviso to Section 73(1) of the Finance Act 1994 on the ground of suppression of facts. We have no hesitation to hold that this allegation of suppression of facts by the assessee is not tenable. The appeal filed by the Department was dismissed by the Hon ble Apex Court as reported in 2011 (23) STR J 94 (SC). The ratio of Apitco case was relied upon by the Tribunal in the case of Madhya Pradesh Consultancy Organization Ltd. Vs CCE Bhopal -2017 (4) GSTL 100 (Tri. Del.) and Centre for Entrepreneurship Development Vs CCE Bhopal -2017 (4) GSTL 338 (Tri.-Del.). We find that number of such programmes have been conducted by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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