TaxTMI 
TaxTMI 
2014 (10) TMI 64
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....M/s Balaji Society has eight institutes under its control, namely, (1) Balaji Law College, (2) Balaji College of Arts, Commerce and Science, (3) Balaji Junior College of Arts, Commerce and Science, (4) Indian Institute of Modern Management (IIMM), (5) Indian Centre for Telecom & Management, (6) Indian Centre of International Business, (7) Indian Centre for Management & Human Resource Development and (8) IIMM- Department of Distance Learning. The first 3 institutes are offering courses recognized by law while the last 5 institutes conducted courses such as Post Graduate Diploma in the field of Information Technology, Marketing, Personnel Management, Human Resources Development, etc. which were not recognized by law. These institutes were not affiliated to any university nor were they approved by statutory authority such as All India Council for Technical Education or under any other law prevailing during the material period. Therefore investigation was initiated by the Department. As part of the Investigation, statements of Prof. (Col) A Balasubramaniam, President of the society were recorded on 17/04/2006 and 09/01/2007 wherein he, interalia, admitted that they are conducting job-o....
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....commercial coaching or training centres. Such centres were brought under the tax net only in 2011 when the definition of 'commercial training or coaching centre' was amended so as to include such institutions also within its purview. Since the impugned demands are for the period prior to 2011, the demands are not sustainable in law. Reliance is also placed on the CBEC circular dated 25/04/2011 wherein it was clarified that the definition of 'commercial training or coaching service' was expanded to include all coaching and training that is not recognized by law irrespective of whether the institute is providing any other course recognized by law. Since Balaji Society is conducting courses recognized by law such as B.Com, B.A., LL.B etc., they are excluded from the scope of commercial coaching or training centre prior to 2011. Reliance is placed on the decision of the apex court in the case of Aditanar Educational Institution vs. Addl. Commissioner of Income Tax wherein it was held that the society under which colleges or institutes are run is indeed the educational institution and the benefit of section 10(22) of the Income Tax Act, 1961 would be available to such institutio....
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....09 (16) STR 107 (Bom) wherein it was held the amounts paid by the assessee under coercive action cannot be retained by the Department. In the present case, the amount was paid by the appellant because of compulsion by the department. 3.8 Interest under Section 75 and penalty under section 78 are not imposable on the appellants and this is a fit case for invocation of section 80 of the Finance Act, 1994. 3.9 There are quantification errors in the computation of service tax demand in as much as amounts collected against sale of prospectus, receipt of fine, L.G. cup sponsorship and uniform for students etc. cannot form part of the taxable value. 3.10 In the light of the above submissions, it is prayed that the appeal be allowed and the impugned order set aside. 4. The ld. Addl. Commissioner (AR) appearing for the Revenue made the following submissions: 4.1 Shri Balaji Society, the appellant herein, has 8 institutes under its aegis. Of these eight, three institutes offer courses recognized by law while the courses offered by the balance 5 institutes are not recognized. Universities have the authority to recognize a degree or certificate. In the present case the courses o....
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....ey have also not adduced any evidence to show that they were under a bona fide belief. Hence the demand for the extended period is justified. In a similar set of facts in the case of ICFAI vs. CCE, Hyderabad [2013 (30) STR 273] invocation of extended period was upheld. 4.7 In view of the above, it is prayed that the impugned order be upheld and the appeal dismissed. 5. We have carefully considered the submissions made by both the sides. Our findings and conclusions are enumerated in the ensuing paragraphs. 5.1 It will be useful at this juncture to peruse the statutory definitions relating to commercial training or coaching and the taxable service in respect of the same. Sections 65(26) and 65(27) of the Finance Act, 1994 defines commercial training or coaching as follows:- '26) "commercial training or coaching" means any training or coaching provided by a commercial training or coaching centre;' 27) "commercial training or coaching centre" means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without iss....
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....isciplines/ academic areas; irrespective of the nomenclature or description of the institute or establishment, as a coaching or training centre or an educational institution; regardless of whether an institute or establishment is incorporated by or registered under any law; and irrespective of distinctions on the basis of curriculum, course content, teaching methodology, course duration or otherwise. Activities of imparting skills, knowledge, lessons on any subject or field or when provided by any entity, institution or establishment which is excluded by a specific and legislated exclusionary clause would alone be outside the fold of the taxable activity." 5.4 If we apply the above ratio to the facts of the case before us, it can be easily seen that the services rendered by the appellant through its 5 institutes shall fall clearly within the scope of 'commercial training or coaching' service as defined in law. In view of the retrospective amendment made in the law by way of explanation to Section 65(105)(zzc), even if the appellant is a charitable trust or society, the appellant would be liable to pay service tax. It is an accepted position as can be seen from the records an....
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....iod of time could have been invoked in the present case for confirmation of service tax demand. In paras 7(4) and 7(5) of the show cause notice dated 31/03/2007, it has been alleged as follows:- "7(4) Whereas it appears that M/s Balaji were required to take registration under sect6ion 69 of the Act and file returns declaring full value under section 70, so that the officer can assess/verify the correctness of the service tax. Though they have obtained registration on 4-5-2006, they have not declared any value. Thus all such value for the period 1-7-2003 to 9-9-2004 has escaped assessment which empowers the department to invoke the extended period of 5 years by virtue of section 73 (1)(a) of Finance Act, 1994; (up to 9-9-04) 7(5) M/s Balaji neither took registration nor registered themselves with the department upto 4-5-2006 and did not declare their activities of commercial training or coaching and when asked they claimed exemption on account of being charitable or vocational in nature - by suppressing their turnover from the department. This suppression empowers the department to raise demand of service tax for period of 5 years by virtu....
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.... the department came to know that the work order was to carry out the job for furniture also. A bare perusal of the records shows that the aforesaid reply was sent by the respondent on receipt of a letter issued by the Commissioner of Central Excise on 27.2.1997. If the period of limitation of five years is computed from the aforesaid date, the show cause notice having been issued on 15.5.2000, the demand made was clearly within the period of limitation as prescribed, which is five years." 5.9 In the facts of the case before us, the appellant did not disclose any facts to the department with regard to the services rendered by them. The investigation was commenced against the appellant on 30/12/2005 when the department sought information about the courses conducted by the appellant followed by another letter dated 27/02/2006 seeking details of the fee structure. The required information was furnished by the appellant only on 08/03/2006. Thereafter, the statements of the appellant were recorded on 17/04/2006 and 09/01/2007. After completion of investigation, the show cause notice was issued on 31/03/2007, that is, almost within a year from the commencement of investigation. In the....
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....se before us, as held by us in the preceding paragraphs, the demand is not time barred and the service tax is legally due and has been received by the Revenue lawfully. Therefore the question of any refund of this amount would not arise at all and we hold accordingly. 5.11 The ld. Counsel for the appellant has pointed out certain errors in the computation of service tax by inclusion of receipts towards sale of prospectus, receipt of fine, uniform for students and LG cup sponsorship. Since these receipts are not consideration for the services rendered, their inclusion in the value of taxable service is not correct in law. The appellant would, therefore, be eligible for abatement of these receipts from the taxable value and we hold accordingly. 5.12 The last issue for consideration is with regard to the imposition of penalty under section 78. The dispute in the present case relates to classification of service. We further note that the appellant had discharged bulk of the service tax demand confirmed (that is Rs. 5.27 Crore (approx.) out of about Rs. 6.59 crore) before the issue of show cause notice. In these circumstances imposition of equivalent amount of penalty under sectio....