University education and recognised qualifications were held outside commercial coaching taxability, with exemption benefits applied.

Universities established under State Acts and institutions recognised by UGC, whose courses led to recognised certificates, diplomas or degrees, were not taxable as commercial training and coaching centre services. The Tribunal applied the Board circular excluding universities and UGC-recognised institutions from the service tax net, and followed earlier decisions holding that education leading to recognised qualifications is outside commercial coaching taxability. It also applied its own earlier order in the appellants' case to extend exemption notification benefits for the relevant period. The service tax demand was therefore unsustainable.

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Issues: Whether the appellants' educational activities and issuance of certificates/degrees by universities established under State Acts and recognised by UGC fell within the taxable category of commercial training and coaching centre service, and whether exemption under the relevant notifications was available.

Analysis: The appellants were universities or institutions established under State Acts or otherwise recognised by UGC under Section 2(f) of the UGC Act 1956, and the courses led to award of recognised certificates, diplomas or degrees. The Board's Circular No. 334/1/2010-TRU dated 26.02.2010 excluded universities created under Central or State Acts and institutions recognised by UGC or professional councils from the tax net. The reasoning in the earlier decisions relied on the wide meaning of "recognised by law" and on the principle that educational programmes leading to recognised qualifications are outside commercial coaching taxability. The Tribunal also noted that its own earlier order in the appellants' case had already extended the benefit of the exemption notifications for the earlier period, and that ratio applied to the present dispute as well.

Conclusion: The appellants' activities were not liable to service tax as commercial training and coaching centre services, and the benefit of the exemption notifications was available. The demand was unsustainable.

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