2018 (3) TMI 503 - AT - Service Tax

Study center affiliated with university exempt from service tax levy under Finance Act, 1994

Gateway For Entrepreneurship And Management Studies Trust Versus Commissioner of Central Excise, Trichy

The Tribunal held that the appellant's services, provided as a study center affiliated with a university, were exempt from service tax levy under Section ... Classification of services - coaching and training services - Department was of the view that the said services would fall under 'Commercial Training Coaching Services' - Held that: - the fees is paid directly to the university by the students in the form of demand draft. The identical issue has been agitated before CESTAT Chennai in the appeal filed by JMC Educational Trust Vs CC Trichy [2010 (9) TMI 509 - CESTAT, CHENNAI]. In the said case, the appellants therein were also obtaining degrees from Alagappa University through Distant Educational Programmes, where the Tribunal had set aside the demand of service tax holding that training and coaching provided by the appellant therein is an essential part of a course or curriculum of a university. Also, the definition of 'commercial training or coaching centre services' as defined under Section 65 (27) of the Finance Act, 1944 during the period of dispute contains a provision excluding 'pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force' - From the documents available in file, we note that the appellant has been authorized as a Study Centre under a Memorandum of Understanding entered into with Alagappa University on the basis of Distance Education Council (DEC) guidelines issued under the IGNOU Act, 1985 - appellant would be exempted from service tax levy. Appeal allowed - decided in favor of appellant. Issues:1. Whether the services provided by the appellant fall under 'Commercial Training Coaching Services' as per the Finance Act, 1994.2. Whether the exemption under Notification No.10/2003-ST applies to the services rendered by the appellant.3. Whether the definition of 'commercial training or coaching centre services' under Section 65 (27) of the Finance Act, 1994 exempts the appellant from service tax levy.Analysis:Issue 1:The case involved the appellant providing coaching and training services to students of a university, collecting fees for such services. The Department contended that these services would fall under 'Commercial Training Coaching Services' as per the Finance Act, 1994. The original authority confirmed the demand of service tax, interest, and penalties. On appeal, the Commissioner (Appeals) upheld the decision. The appellant argued that the services provided did not fall under the definition of 'Commercial Training or Coaching Services' and relied on a previous decision by CESTAT Chennai.Issue 2:The appellant contended that they were a study center affiliated with a university, and the fees collected were remitted to the university, with examinations also conducted by the university. The appellant argued that since the degree certificate was issued by the university, their services did not qualify as 'Commercial Training or Coaching Services.' The Revenue argued that any charges collected apart from fees would disqualify the appellant from the exemption under Notification No.10/2003-ST.Issue 3:The Tribunal analyzed the definition of 'commercial training or coaching centre services' under Section 65 (27) of the Finance Act, 1994. It was noted that the appellant was authorized as a Study Centre under a Memorandum of Understanding with the university based on Distance Education Council guidelines. The Tribunal concluded that the appellant would be exempt from service tax levy under Section 65 (27) of the Act, even without the benefit of Notification No.10/2003-ST. Relying on previous decisions, the Tribunal set aside the impugned orders and allowed the appeals with consequential benefits as per law.