TaxTMI 
TaxTMI 
2013 (10) TMI 433
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (27), the expression "Commercial Training or Coaching Centre". By Finance Act, 2010 an "Explanation" was appended to Section 65(105) (zzc), with effect from 1.7.2003. In the order dated 16.4.2013, a Division Bench prima facie doubted the vitality of reasons recorded in the decision in Magnus Society vs. C.C. & C.E., Hyderabad 2009 (13) STR 509 (Tri. Bang.), which tried to mark a distinction between activities of an institution imparting a particular skill such as in computers, computer operations, spoken English or accountancy on the one hand and a proper format of education imparted by institutions imparting "higher learning" such as MBA, management, computer science and such other disciplines; and concluded that institutions imparting higher learning like MBA etc. cannot be characterized as commercial training or coaching centres; that institutions preparing students for entrance examination to various universities could be called commercial training or coaching centre; but not so institutions recognized by law. 2. Before we proceed to analyses of the scope and reach of the taxable service specified in Section 65(105) (zzc) of the Act, it is useful to extract the relevant pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion, whether or not such centre or institute is registered as a trust, a society or similar other organisation under any law for the time being in force and carrying on its activity with or without profit motive and mandates that the expression "commercial training or coaching" be construed accordingly. (iii) Section 65(26) defines "commercial training or coaching" to mean any training or coaching provided by a commercial, training or coaching centre; (iv) Section 65(27) defines "commercial training or coaching centre". The expression is defined in terms of several components. Firstly, in terms of an entity, namely any institute or establishment; secondly, in terms of the generic activity pursued by such entity namely providing of commercial, training or coaching; thirdly, by defining "training or coaching" to mean imparting skill or knowledge or lessons on any subject or field; fourthly, by excluding from the scope of the activity the area of sports. Consequent on this exclusionary clause, providing of commercial training or coaching by way of imparting skill or knowledge or lessons in or in relation to sports, is excluded from the ambit of the defi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....raining or coaching centre" is pre-school coaching and training centre and any institute or establishment which issues a certificate, diploma, degree or any other educational qualification recognized by extant law. 7. To successfully claim immunity from the liability to service tax in this area an institute or establishment must therefore establish that it is either not imparting skill, knowledge or lessons on any subject or field (except sports) or that it is a pre-school coaching and training centre or an institute or establishment which issues any certificate, diploma, degree or any educational qualification recognized by extant law. If an institute or establishment fails to establish immunity on the above exclusionary - parameters, it would fall within the ambit of the defined entity and consequently be liable to levy of service tax. 8. ANALYSIS OF PRECEDENTS: (a) Challenging an assessment to service tax, Great Lakes Institute of Management Ltd. (GLIM) vs. C.S.T. Chennai 2008 (10) STR 202 (Tri-Chennai) preferred an appeal to this Tribunal. GLIM conducts Post Graduate programme in Management, a full time programme and an Executive MBA programme, as a part t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... self-financed provide the same services and perform the same functions as regular colleges so affiliated. The High Court rejected the contention that education is not taxable under the Constitution and ruled that no Constitutional provision prohibits levy of service tax on education. An alternative contention that - parallel colleges come within the exclusionary clause of the definition, of "commercial training or coaching centre" was also repelled. The Court held that the categories of Institutions excluded from the definition clause include only institutions or establishments issuing certificates, diplomas, degrees or any other educational qualification recognized by the law for the time being in force; that as - parallel colleges merely impart training or coaching to students to appear at University examinations as private students (but do not issue certificates etc.), they do not come within the exclusionary clause. The High Court however held that levy of tax for services rendered by - parallel colleges is discriminatory and violative of Article 14 since the burden of tax indirectly fall on students; and students pursuing a course of education in regular colleges are excluded....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e breadth to encompass institutions imparting higher learning like MBA/Management in Computer Science or any other discipline. The Tribunal also observed that Training or Coaching provided to enable a candidate to appear for entrance examination to various institutes could be called "commercial training or coaching" but not institutions which offer degrees, which are recognised by law. (f) The above view was reiterated for allowing the assessee's appeal in Institute of Chartered Fin. Analysts of India vs. CC & CE, Hyderabad-II 2009 (14) STR 220 (Tri. Bang.). Summing up its analysis for granting relief, the Tribunal held that the assessee was imparting higher education; it falls outside the definition of "commercial training or coaching centre" since it confers degrees recognised by law; that various State Governments have recognised the ICFAI University by Notifications; that there is a UGC recognition also; that it cannot therefore be said that the assessee is not conferring degrees recognised by law; that since the assessee obtained income tax exemption it cannot be said to be indulging in any commercial activity; and since the assessee's institutions are ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of instruction/training/coaching; that the relevant statutory provisions provide for approval of the institutes, which are therefore regulated by law; that the qualification resulting from the training / coaching provided by these institutions is conferred some value under law even if only for the purpose of eligibility for eventually obtaining a license/approval for certifying repair/maintenance/ airworthiness of aircrafts; that the relevant statutory provisions mark a distinction between approved and unapproved institutions; and a successful candidate from an approved institution alone would be entitled to enforce the right conferred by the statutory provisions, namely to a one year relaxation by the Director General of Civil Aviation. On this analysis the High Court concluded that these institutions provide education resulting in issuance of a degree/ diploma/ qualification recognised by law and therefore are outside the purview of the definition of commercial training or coaching centre, under Section 65 (27) of the Act. (i) Counsel for the assessee also referred to decisions of the Supreme Court in Sole Trustee, Loka Shikshana Trust vs. Commissioner of Income T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....39;commercial training or coaching', since it is a format of imparting education through the medium of interactive website which is an established mode of coaching/teaching.. 9. Other Counsel for some of the appellants, in particular Shri P.K. Sahu and Mr. Krishna Kant referred to lexicographic and textual authorities to persuade us that there is a fundamental distinction between education"" on the one hand and "training or coaching" on the other. The authorities presented on this aspect endeavour to nuance distinctions between "education" and "training"; between "teaching" and "coaching"; and "training" and "coaching". According to these authorities, training and education constitute different facets of learning and there are major differences between the two. Their purpose, history and methodology are distinct. Training is undertaken for gaining specific skill. Education in contradistinction is undertaken for furthering individual knowledge and development of intellect and education is not only about obtaining employment, the methodology is also different. Training is through specialized courses and textbooks; while independent thinking at a micro level is encouraged, out ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the precedents nor the relevant provisions of the 1961 Act, offer substantial assistance in interpreting the scope of the expression "commercial training or coaching" or "commercial training or coaching centre", the relevant expressions which fall for consideration before us. 12. The provisions of the Act enact a specific regime of taxation, under a distinct field of legislation authorised to Parliament. In the absence of authorization under the provisions of the Act, to refer to provisions in any other enactment to identify the scope and contours of expressions used in the Act, identifying etymological nuances, distinctions or searching for explication of meaning of expressions used in the Act, by recourse to definitions or meaning of similar or analogous expressions in other legislation, is inappropriate. The various pedagogic, lexicographic or textual authorities cited at the Bar to explain the distinction between the concepts of "education", "training" or "coaching" also do not offer appropriate or coherent guidance to aid comprehension of the scope of the relevant expressions defined in the Act. In our considered view, what "commercial training or coaching" means must be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reference to the nature and objectives of the activity pursued by a commercial training or coaching centre. In this definitional regime, training or coaching for imparting skill, knowledge or lessons on any subject or field constitutes commercial training or coaching. Though complexly drafted, this part of the definition seeks to define the contours of 'training or coaching' in the very provision and an identical expression employed in Section 65(27) as well. From the legislated definition, training or coaching therefore means imparting skill, knowledge or lessons on any subject or field. Parliament has not restricted the scope of 'training or coaching' as is defined, by superadding any conditions such as in terms of pedagogic methodlogy, course or training content, syllabus, duration, periodicity, tenure/duration or like conditions. Where legislature cuts with a wide blade, absent a constitutional basis, we discern no scope for introducing restrictions by employing an inappropriate, unwarranted and therefore a counter - majoritarian device, of restrictive interpretation. Where a legislatively mandated definition is available, it is impermissible to look to extra -....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... - training and coaching centre or any institute or establishment which issues a certificate, diploma, degree or any other educational qualification recognized by extant law, is excluded from the definition, of 'commercial training or coaching centre'. Consequently, commercial training or coaching provided by such entities are outside the fold of the defined service. Commercial training or coaching on any subject or field of sports is also specifically excluded. 17. Subject to the excluded entities, expressly enacted in Section 65(27), any other institute or establishment which imparts skill/knowledge/lessons on any subject or field (excluding sports), would be a commercial training or coaching centre providing commercial training or coaching; a taxable service under Section 65 (105) (zzg), irrespective of the nature of training regime; the course content; and irrespective of whether the training or coaching is in respect of one or more disciplines of learning, skills or knowledge or a broader raft of academic disciplines. 18. Section 65 (27) of the Act was amended further by Finance Act, 2011, w.e.f. 01.05.2011. As amended, the provision now reads: "c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aining or coaching centre" in the definition, there would be no rationale for engrafting an exclusionary clause broadly formulated, excluding an institute or establishment which issues any certificate, diploma, degree or any educational qualification recognised by law. Issuance of a diploma or a degree is normally associated with a course of instruction in higher learning, "higher" being in any event word of indeterminate meanings, if devoid of context. It is an established principle of statutory interpretation that in a legislative provision a subject or field would not be specifically excluded by employing an exclusionary clause, if not included in a preceding clause. Exclusionary clauses, in legislative drafting are intended to exclude a subject or field which forms a part of the enacting clause / provision. 21. Shri Arvind Datar, ld. Sr. Advocate for GLIM additionally contended that till 2005 management education (provided by GLIM) was not regulated by any statute. The AICTE Act, 1987 was amended during 2005 to include management education within the scope of technical education and thus bringing management education within the ambit of the regulatory provisions of the 1987 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts to explain how the authorities construed the relevant statutory provisions from time to time and the scope of exemptions granted or modified, in exercise of the power under Section 93(1) of the Act. We find no warrant or justification for a detailed analysis of the several administrative constructions of statutory provisions since the authoritative interpretation of the statutory provisions must rest with this Tribunal, subject of course to appellate review. Exemption Notifications, issued in exercise of the executive power of the State as authorised by the provisions of the Act, are in any event of no relevance to interpretation of legislative provisions. 24. Ld. Counsel Shri P.K. Sahu has cited the decisions of the Supreme Court in Laxmi Engineering Works vs. P.S.G. Industrial Institute (1995) 3 SCC 583 and in M.P. Electricity Board and Others vs. Shiv Narayan and Another (2005) 7 SCC 283 to explain the scope of the word "commercial" in the definition of "commercial training or coaching centre". Since Parliament has introduced the retrospective "Explanation" in Section 65 (105)(zzc) of the Act and this Explanation clarifies assumed ambiguities in ascertainment of the expre....