Service tax on commercial coaching & training services with universities set aside, citing non-discrimination principle

The Tribunal set aside the demand for service tax on commercial coaching and training services provided by the appellants in collaboration with universities, emphasizing that institutions offering recognized degree courses should not be subjected to service tax. The decision was influenced by previous rulings and the principle of non-discrimination, concluding that the levy of service tax on educational services like those provided by the appellants was not justified. The appeals were allowed with consequential relief, based on the Tribunal's interpretation of the law and constitutional principles.

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Issues involved:
Demand of service tax under commercial coaching and training under Section 73(2) of Finance Act, 1994.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai involved the confirmation of the demand of service tax under commercial coaching and training. The adjudicating authority had upheld the demand, which was also confirmed by the Commissioner (Appeals). The appellant argued that they were providing distant education in collaboration with universities, where the curriculum and fees were decided by the universities. They cited previous Tribunal orders to support their claim. On the other hand, the respondent contended that the exemption was not applicable as charges were paid directly to the center. The appellant argued that they were not rendering commercial coaching and were under the control of universities. The Tribunal examined the memorandum of understanding submitted by the appellant, which supported their claim that the institution operated like a parallel college. Referring to a decision by the Kerala High Court, the Tribunal concluded that the levy of service tax on services provided by institutions like the appellant was arbitrary and discriminatory. Following the Kerala High Court's decision, the Tribunal set aside the impugned orders and allowed the appeals, stating that the levy of service tax on training and coaching provided by the appellants, forming an essential part of a university curriculum, was not justified.

In conclusion, the Tribunal's judgment was based on the principle that institutions providing education in collaboration with universities and offering courses leading to recognized degrees should not be subjected to service tax. The decision was influenced by previous rulings and the constitutional principle of non-discrimination. The Tribunal emphasized that the levy of service tax on such educational services was not justified and set aside the demand for service tax, allowing the appeals with consequential relief.

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