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One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=772900 https://www.taxtmi.com/caselaws?id=772900 Commercial training or coaching centre services or not - entitlement to take benefit of the Notification dated 20.06.2003 to support the plea that service tax was not leviable under 'commercial training or coaching centre' services - benefit of the Notification dated 25.04.2011 - exemption from 01.07.2012 to 10.07.2014 in terms of serial no. 9 of the Exemption Notification dated 20.06.2012 - exemption from 11.07.2014 onwards in terms of the Notification dated 11.07.2014 that amends the earlier Notification dated 20.06.2012 - invocation of extended period of limitation contemplated under the proviso to section 73(1) of the Finance Ac. Entitlement to take benefit of the Notification dated 20.06.2003 to support the plea that service tax was not leviable under 'commercial training or coaching centre' services - HELD THAT:- It is not in dispute that the students are directly paying charges to the appellant. The Notification dated 20.06.2003 specifically excludes the benefit of the exemption to centres where the charges are directly paid to the "commercial training or coaching centre". The appellant would, therefore, not be entitled to the exemption granted under the Notification dated 20.06.2003. This is precisely what has been held by the Commissioner in the impugned order dated 21.06.2017. There is, therefore, no error in the finding recorded by the Commissioner. Whether the appellant can claim the benefit of the Notification dated 25.04.2011? - HELD THAT:- The appellant is a study centre imparting education for some of the courses of the Universities. It is the Universities that award certificate, diploma or degree and not the appellant. The finding recorded by the Commissioner that in such circumstance the appellant would not be entitled to the benefit of the Notification dated 25.04.2011, therefore, also does not suffer for any illegality. Whether the appellant would be entitled to exemption from 01.07.2012 to 10.07.2014 in terms of serial no. 9 of the Exemption Notification dated 20.06.2012? - HELD THAT:- The exemption would be available to a coaching centre only when the consideration in lieu of services provided by the service provider is paid by the University and not by the students. The appellant directly receives the fees from the students and the consideration is not received from the Universities. The benefit of this Notification would, therefore, not be available to the appellant. This is what has been held by the Commissioner in the impugned order for denying the benefit of this Notification. There is, therefore, no error in the finding recorded by the Commissioner. Whether the appellant is entitled to exemption from 11.07.2014 onwards in terms of the Notification dated 11.07.2014 that amends the earlier Notification dated 20.06.2012? - HELD THAT:- The amended Notification has been reproduced in paragraph 17 of this order. The benefit of clause 9(b) is not available to the appellant as none of the conditions are satisfied. The conditions do not relate to imparting of education provided by the service provider to the educational institution. The finding recorded by the Commissioner, therefore, that the benefit of this Notification cannot be taken by the appellant does not suffer for any illegality. Whether the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act could be invoked by the department? - HELD THAT:- There is substance in the contention advanced on behalf of the appellant that mere suppression of fact is not enough as it has also to be conclusively established that suppression was wilful with an intent to evade payment of service tax - It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be "wilful' since "wilful' precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression "wilful" before "suppression of facts" under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be "wilful' and there should also be an intent to evade payment of service tax. In Pushpam Pharmaceuticals Company, the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since "suppression of facts' has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. Thus, the extended period of limitation could have been invoked only if there was suppression of facts with intent to evade payment of service tax - the extended period of the limitation contemplated under the proviso to section 73(1) of the Finance Act could not have been invoked in the facts and circumstances of the case. Conclusion - The appellant has produced a chart which shows the period covered by the extended period of limitation under the proviso to section 73(1) of the Finance Act and the normal period provided for in section 73(1) of the Finance Act. It transpires from the chart that the period from April 2010 to 12.04.2014 is covered by the extended period of limitation. The demand of service tax for the extended period of limitation with interest and penalty, therefore, cannot be sustained. However, the demand for the normal period is confirmed. The matter would, therefore, have to be remitted to the Commissioner to only examine what portion of demand falls within the normal period of limitation contemplated under section 73(1) of the Finance Act for it is such demand that has been confirmed and then consider whether penalty under sections 77 and 78 of the Finance Act should be leviable on the appellant for this period and if so then to determine amount of penalty - appeal allowed in part. Case-Laws Service Tax Fri, 06 Jun 2025 00:00:00 +0530