TMI Blog2023 (10) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... MADRAS HIGH COURT ], a learned Single Judge of this Court accepted the claim of the petitioner therein in so far as exemption for payment of service tax on amounts collected towards affiliation. However, learned Single Judge did not accept the contention of the said University in so far as collection of rent from service providers like Bank, Post Office, Canteens, etc. In UNION OF INDIA VERSUS WOOD PAPERS LTD. [ 1990 (4) TMI 55 - SUPREME COURT ], the Hon ble Supreme Court held that at the stage of applicability, the Notification has to be construed strictly and the ambit should not be widened or extended. It further held that once only when the first stage is crossed, the notification should be construed liberally that is other technicalities and procedural compliances should not come in the way of extending the benefit. There was no scope for expanding the scope of negative list in Section 66D(l) of the Finance Act, 1994 as the petitioner has not crossed the threshold. The Hon ble Supreme Court has repeatedly held that the operation of the notification has to be judged not by the object which the rule making authority had in mind but the words it has employed effectuate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of 2022, W.P.Nos.24261 27092 of 2022, W.P.Nos.5967 of 2023 and in W.P.No.15333 of 2020. 2. The dispute in this writ petition is under the Finance Act, 1994. The disputes in other writ petitions are under the respective GST Enactments of 2017 as in force with effect from 01.07.2017 for similar supply of services. W.P.Nos.11038, 27092 of 2022 and W.P.No.5967 of 2023 have been filed by the provider and recipient of service. This writ petition has been filed by the service provider itself. 3. Other writ petitions were de-tagged and heard separately and are being disposed separately. 4. The petitioner in this writ petition is aggrieved by the Order in Original No.27 of 2019 (ST) dated 29.10.2019 passed by the first respondent and consequential recovery order dated 06.10.2020 bearing reference O.C.No.170 of 2020 of the second respondent. 5. By the impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019, the first respondent has confirmed a sum of Rs. 1,19,85,616/- towards service tax due from the petitioner. Apart from service tax, interest under Section 75 of the Finance Act, 1994 and penalty under Section 78 of the Finance Act have also been imposed on the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Joint Commissioner, Office of the Commissioner of GST and Central Excise, Madurai , 2021 (54) G.S.T.L. 385 (Mad.) ii)The Tamil Nadu Dr.MGR Medical University, Chennai vs. The Principal Additional Director General Directorate General Directorate General of Goods and Services Tax, Intelligence, Chennai , 2022 (64) G.S.T.L. 475 (Mad.) 9. The learned counsel for the petitioner has also brought to the attention to the decision of the Madurai Bench of this Court in Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore , 2022 (58) G.S.T.L. 27 (Mad.). In Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore , 2022 (58) G.S.T.L. 27 (Mad.), this Court has allowed the case of the petitioner therein except to the extent of renting of immovable property. 10. Like the Manonmaniam Sundaranar University, The Tamil Nadu Dr.MGR Medical University, Chennai and The Madurai Kamaraj University , the Petitioner is also providing services to various colleges seeking affiliation with it. Prior to affiliating colleges, the petitioner inspects the colleges and charge fees. At the time of renewal of the affiliati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 6/2014- ST dated 11-7-2014, Mega Exemption Notification No.25 of 2012-S.T dated 20.06.2012 was amended and introduced the definition of an educational institution in explanation to the above Notification in definition clause 2 (oa) which was further amended by Notification No. 9/2016-S.T., dated 1-3- 2016 by incorporating the ingredients of Section 66D(l) of the Finance Act, 1994 in the above definition. Hence it is submitted that the petitioner was not liable to pay service tax as it was outside the purview of charging provision under Section 66B for the service provided was in the negative list in Section 66D(l)(ii) of the Finance Act, 1994 as it stood with effect from 01.07.2012 up to its deletion on 14.05.2016. It is submitted that, the petitioner was thereafter eligible for exemption under the Mega Exemption Notification No.25 of 2012-S.T dated 20.06.2012 as amended from time to time. Hence, prayed for allowing the writ petition. 18. On behalf of the respondents, it was stated that the writ petition is devoid of merits and is therefore liable to be dismissed. It is submitted that the present writ petition was filed almost after a lapse of one year and eight d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be dismissed. 25. On merits, it was submitted that services provided by the petitioner does not come within the purview of the negative list in Section 65D(l)(ii) of the Finance Act, 1994 with effect from 01.07.2012 up to its deletion vide Finance Act, 2015 with effect from 14.05.2016. 26. It is further submitted that the petitioner was not exempted from payment of service Tax vide Mega Exemption Notification No.25/2012- S.T dated 20.06.2012 with effect from 01.07.2012 as amended from time to time. It is further submitted that the decision cited by the learned counsel for the petitioner cannot be said to have attained finality as the department is in appeal. 27. It is submitted that none of the amendment to the Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended by the notification are relevant. 28. It is stated that earlier certain categories of services provided to an educational institutions or by an educational institutions were exempted from Service Tax. It is submitted that the service provided by the petitioner were however not exempted under the above notification. 29. It is submitted that vide Notification No.6/2014-S.T dated 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 226 of the Constitution. 15. We may now revert to the Full Bench decision of the Andhra Pradesh High Court in Electronics Corpn. of India Ltd. [Electronics Corpn. of India Ltd. v. Union of India, 2018 SCC Online Hyd 21 : (2018) 361 ELT 22], which had adopted the view taken by the Full Bench of the Gujarat High Court in Panoli Intermediate (India) (P) Ltd. v. Union of India [Panoli Intermediate (India) (P) Ltd. v. Union of India, 2015 SCC Online Guj 570 : AIR 2015 Guj 97] and also of the Karnataka High Court in Phoenix Plasts Co. v. CCE [Phoenix Plasts Co. v. CCE, 2013 SCC Online Kar 10432 : (2013) 298 ELT 481]. The logic applied in these decisions proceeds on fallacious premise. For, these decisions are premised on the logic that provision such as Section 31 of the 2005 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 994 for services rendered by it to various colleges till its deletion vide Finance Act, 2016 and thereafter the benefit of Entry 9 to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended and from time to time thereafter. These twin benefits are captured in the following table: 66D of Finance Act, 1994 till its deletion by Finance Act, 2016 Entry No.9 Mega Exemption Notification No.25/2012-S.T dated 20.06.2016 (l) services by way of:- i....... ii. education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; iii......... With effect from 01.07.2012 *With effect From 11.07.2014 vide Notification No.6/2014-S.T dated 11.07.2014 (i)Services provided to or by an * educational institution in respect of education exempted from service tax, by way of,- (a)auxiliary educational services; or (b)renting of immovable property; (*substituted with the provided to vide Notification No. 3/2012-ST dated 1.3.2013.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Office of the Commissioner of GST and Central Excise, Madurai the Court has observed as under :- 14. Under Clause 'l' there are three categories of services by educational institutions. One is pre- school to higher secondary education service, second is education as a part of curriculum for obtaining a qualification recognised by law for the time being in force and the third one is education as a part of an approved vocational course. This Court feels that, sub-clause 2 of Clause 'l' of Section 66-D is relevant for the present issue, the reason being that, whatever be the education as a part of curriculum for obtaining a qualification recognised by law for the time being in force means whatever be the Degree, Diploma, PG diploma, Professional Degree or Post Graduate Degree are concerned, in order to obtain such qualification, if education being imparted as a part of curriculum, that education shall be part of service for the purpose Clause 'l' for getting exemption. 15. When an educational institution is imparting education as part of curriculum for obtaining a qualification as stated supra, no doubt, such services are being exempted and in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It also expands to services relating to admission or conduct of examination by such institutions. The word 'such institution' according to the revenue is nothing but the institution which impart education and conduct examination ie., affiliated college and not the university. But, in the considered view of this Court, that kind of interpretation is not possible, in view of the expanded meaning that has been given and the explanation given, which shows the intention of the Central Government who issued the mega exemption notification, under which, we can understand that, what are all the allied services that shall form part of the educational services, which may be services provided to the staff, services provided to the faculty, expanded services like transportation, boarding and lodging and other allied activities enabling the students as well as the staff and faculty to come to the institution and getting imparted the education. 19. In this context, sub-clause (iv) of clause 9 referred to above is so important, which says that, services related to admission or conduct of examination by such institution are exempted services. Here, the services rendered to admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the university and the colleges affiliated to the university are only facilitators. Therefore, examinations are not conducted directly by the colleges, it is being conducted by the university, but the facilitator is the college. Therefore, the word conduct of examination by such institution means, conduct of examination by the university and the college and not by the college alone. The examination is the examination of the university, for which, facilitation is given by the college, wherein the examinations are conducted and ultimately, valuation is to be done by the university and marks are awarded and degree is conferred by the university. Therefore, it is the university, where, the facilitator is the college, where, the examination is being taken place and therefore, the word conduct of examination , cannot have such a narrow and pedantic interpretation as has been given by the Advance Ruling Authority in their order dated 19.11.2020, which has been in fact, heavily relied upon by the respondent revenue. Therefore, this Court is not subscribing the said view given by the Advance Ruling Authority in their order dated 19.11.2020. 22. In this context, it is further to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which are also included in the purview of educational services, in view of clause 9, which has given an expanded meaning of educational services which includes the services to be provided not only to the students, but also faculty and staff. In this category, the faculty and staff of the university are getting whatsoever services by way of transportation, boarding and lodging etc., are also to be included in the meaning educational services being provided by the educational institutions ie., the petitioner herein which can also be exempted from the purview of service tax. Therefore, that aspect of assessment and demand made for levying service tax on the services provided by the petitioner institution under the heading renting of immovable property also, in the considered view of this Court, cannot be sustained. Therefore, on both aspects, the assessment and demand made by the respondent, in the considered view of this Court, is untenable and therefore, it is liable to be interfered with. 25. The alternative appeal remedy plea raised by the respondent also has been considered and in this context, the judgment of the Gujarat High Court has been placed for my consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22(062) GSTL 0385 SC; ii. Union of India vs. Mrgadarshi Chit Funds(P) Ltd. , 2017(003)GSTL 0003 SC iii. Commissioner of Cus.(Import), Mumbai vs. Dilip Kumar Company , 2018(361)ELT 0372 SC iv. Shabina Abraham vs. Collector of Central Excise and Customs , 2015(322)ELT 0373 SC v. M.P.Steel Corporation vs. Commissioner of Central Excise , 2015(319)ELT 0373 SC vi. Dujodwala Resins Terpenes Ltd., 2014(311)ELT 0892 G.O.I. vii. Sanket Food Products P.Ltd., 2014(307)ELT 0608 G.O.I viii. Unique Phrmaceutical Laboratories, 2013(295)ELT 0129 G.O.I, ix. Ranbaxy Laboratories Ltd. vs. Union of India , 2011(273)ELT 0003 S.C. x. Commissioner of C.Ex. Chandigarh vs. Doaba Steel Rolling Mills , 2011(269)ELT 0298 SC xi. Pappu Sweets and Biscuits vs. Commissioner of Trade Tax, U.P.Lucknow ,2004(178)ELT 0048 S.C xii. Commissioner of Central Excise, Pondicherry vs. Acer India Ltd., 2004(172) ELT 0289 S.C xiii. Commissioner of Cental Excise, Meerut vs. Kisan Sahkari Chinni Mills Ltd. , 2001(138)ELT 0946 G.O.I xiv. Baidyanath Ayurved Bhawan Pvt. Ltd. , vs. Excise Commissioner U.P ., 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions recognized by law would be covered . Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualification . 47. In 4.12.5 of the Educational Guideline, it was further clarified:- 4.12.5 Are services provided to educational institutions also covered in this entry ? No. Such services are not covered under the negative list entry. However certain services provided to or by educational institutions are separately exempted under the mega notification. These are services provided to or by an educational institution in respect of education exempted from service tax, by way of,- (a) auxiliary educational services; or (b) renting of immovable property 48. A reading of the above clarification indicates that the services provided by the petitioner to colleges for grant/renewal of affiliation was not in contemplation of the Parliament when it was introduced Section 66D(ii) by Finance Act, 2012 into Chapter V of the Finance Act, 1994 with effect from 01.07.2012. 49. The argument of the petitioner is that the services provided by the petitioner University to various colleges fell within the purv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by the Sales Tax Authorities. 53. Under the scheme of the Finance Act, 1994 with effect from 01.07.2012, all activities provided by one person to another person for consideration is a service within the meaning of Section 65B(44) of the Finance Act, 1994. 54. No service tax was payable where an activity did not satisfy the definition of service within the meaning of Section 65B(44) of the Finance Act, 1994. 55. No service tax was also chargeable where an activity satisfied the definition of service but was exempted from payment of service tax under Notification issued under sub-section (1) of section 93 of the Finance Act, 1994. Similarly, no service tax was payable under Section 66B of the Finance Act, 1994 on services falling under the negative list in Section 66D of the Finance Act, 1944. 56. With effect from 01.07.2012, there were two categories of services on which no service tax was payable. They are:- (1) those services which were in the negative list in Section 66D of the Finance Act, 1994 and are therefore outside the purview of the levy under Section 66B of the Finance Act, 1994, and (2) those services which were exempted under a notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time being in force. 63. Amount charged by the petitioner on the colleges for inspection of colleges for affiliation/recognition /renewal of affiliation was not in contemplation of the Parliament. The said activity cannot be termed as a service by way of education as was contemplated in Section 66D(l)(ii) of the Finance Act, 1994. 64. Exclusion from Service Tax levy in Section 66D(l)(ii) of the Finance Act, 1994 was intended to cover only colleges so that they do not charge service tax on the students for provision of services by way of education as a part of curriculum for them to obtain a qualification recognized, by any law, for the time being in force. 65. Therefore, to begin with the services provided by the petitioner did not fall within the purview of negative list as defined in Section 65B(34) read with Section 66D(l)(ii) of the Finance Act, 1994 and/or as amended by Notification No.9 of 2016-S.T dated 01.03.2016. Therefore, the contention of the petitioner that the petitioner was outside the purview of Service Tax levy under Section 66B of the Finance Act, 1994 is liable to be rejected. 66. Therefore, the above views expressed in Madurai Kamaraj Univers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined the expression auxiliary educational services as follows:- (f) auxiliary educational services means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution; 74. At the time of inception with effect from 1.7.2012, there was no definition for the expression educational institution in Mega Exemption Notification No.25/2012-S.T. dated 20.06.2012. 75. Unless, the affiliation service provided by the petitioner fell within the purview of definition of the expression auxiliary educational services as defined in clause 2(f) to the Mega Exemption No.25/2012- S.T dated 20.06.2012, question of the petitioner being eligible to exemption under Entry 9 to Mega Exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government transportation of students, faculty or staff of such institution. 4.12.7 Are the auxiliary educational services for all educational institutions exempt? No. Exemption is available for services to or by educational institutions in respect of education exempted from service tax. Therefore, service tax is chargeable on such auxiliary educational services which are in respect of education chargeable to service tax. 79. It is thus clear that services provided to educational institutions which are already exempted was not available under Entry 9 to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. 80. Although, the Educational Guide issued by the Central Board of Excise and Custom is not binding on the Court, they nevertheless represent the understanding of the Deparement. They are relevant as contempory expositio of law. 81. In Commissioner of Trade Tax v. Kajaria Ceramics Ltd. 2005 (191) E.L.T. 20 (S.C.), the Hon'ble Supreme Court held that the intention and purport of Notification have to be interferred from contemporary official statements as contemporary expositio and used as aids to interpret even recent statutes. 82 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticised for being tied too closely to the statutory words and for failing to give effect to the intention of the Parliament or the law-maker. In Collector V Parle Exports Pvt. Ltd. 1989(38) E.L.T. 741 (S.C.), the Court held that a ccording to the tradition of our law, primacy is to be given to the text in which the intention of the lawgiver has been expressed. 86. It has held as under:- Such language, it has been said, in Cross s Statutory Interpretation (Second Edition) at page 21, appears to suggest that there are two units of enquiry in statutory interpretation - the statutory text and the intention of the Parliament - and the Judge must seek to harmonize the two. However this is not correct. According to the tradition of our law, primacy is to be given to the text in which the intention of the law-giver has been expressed. 87. The service provided by the petitioner to various colleges while granting or renewing affiliation cannot be construed as auxiliary educational services in view of the above definition clause 2(f) to Mega Exemption Notification No.25/2012-ST dated 20.06.2012 with effect from 01.07.2012. Therefore, the contention of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an educational institution , by way of, - (i) transportation of students, faculty and staff; (ii) catering, including any midday meals scheme sponsored by the Government; (iii)security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution ; Definitions oa) educational institution means an institution providing services specified in clause (1) of Section 66D of the Finance Act, 1994 (32 of 1994):] 94. Only certain categories services outsourced by educational institution viz., constituent college alone were exempt namely services relating to admission to, or conduct of examination by, alone are exempted under Entry No.9(6)(iv) to Mega Exemption No.25/2012-S.T dated 20.06.2012. 95. Exemption under Entry 9(b)(iv) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended by Notification No.6/2014-S.T. dated 11.07.2014 would be applicable to the petitioner only if the services provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident of India. 101. Thus, with effect from the date on which deletion of Section 66D(l) vide Finance Act, 2016 came into force, Entry No.9 to Mega Exemption Notification No.25/2012-ST dated 20.06.2012 was to be read as follows:- Mega Exemption Notification No.25/2012-ST-dated 20.06.2012 Entry No.9: Services provided,- (a)by an educational institution to its students, faculty and staff; b) to an educational institution , by way of,- (i)transportation of students, faculty and staff; (ii)catering, including any mid-day meals scheme sponsored by the Government; (iii)security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution ; Definitions 2(oa) educational institution means an institution providing services by way of:- iv) Pre-school education and education up to higher secondary school or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a curriculum for obtaining a qualification recognized by law, it will not mean that the amount changed by the petitioner was exempted under Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended from time to time. What was exempted are only some of the peripheral /ancillary services which earlier grouped as auxiliary services in the definition clause 2(f) to Mega Exemption Notification No.25/2012 - S.T dated 20.06.2012 as it stood prior to its deletion vide Notification No.6/2014- S.T dated 11.07.2014. 105. Only such auxiliary services i.e. services relating to admission to such educational institutions and/or for conduct of examination provided to educational institution which were outsourced by such educational institution alone were exempted under Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. 106. It cannot be said services provided by the petitioner to such educational institution while inspecting the colleges for affiliating them or renewing the affiliation would be services provided to such educational institution by way of services relating to admission to, or conduct of examination by, such institution. 107. University such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be equated with activity of affiliation and renewal of affiliation. 111. The language of Entry 9 in Mega Exemption Notification No.25/2012-S.T.dated 20.06.2012 as amended by various notification and the last mentioned amendment vide Notification No.9 of 2016-S.T. dated 01.03.2016 was clear and unambiguous. Thus, there was no scope for interpretation. Since the language was plain, it had to be read plainly as held in Cape Brandy Syndicate vs. IRC (1921) 1 KB 64 which has been followed by the Hon ble Supreme Court in several cases. 112. There was no ambiguity either in the language in Section 66D(l) of the Finance Act, 1944 as it stood till its deletion by Finance Act, 2016 (28 of 2016) dated 14.05.2016 under Entry 9 in Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended by various notification and the last mentioned amendment vide Notification No.9 of 2016-S.T. dated 01.03.2016 to warrant any beneficial interpretation in favour of the petitioner. 113. The neither expression education as a part of curriculum for obtaining a qualification recognized by any law, for the time being in force in section 66D)(l)(ii) of the Finance Act, 1994 deletion t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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