TaxTMI 
TaxTMI 
2008 (11) TMI 126
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....inst the order of the Commissioner confirming demand of service tax treating the various training programmes conducted by them as commercial training or coaching service, demand for service tax on the membership fees and other amounts collected from the members treating the same as club or association service and service tax on various seminars and meetings held by them treating them as convention service. An amount of Rs. 65,70,162 has been demanded being the service tax on commercial training service, Rs. 1,91,233 on club/association service and Rs. 71,710 on convention service for the period from 1-7-2003 to 31-3-2006, 16-6-2005 to 31-3-2006 and 1-4-2003 to 31-3-2004 respectively. Penalties also have been imposed under section 75A, 76, 77 and 78 on the association. Hence the appeal. 2. Heard both the sides. Ld. Advocate Sh. J.C. Patel on behalf of the appellants made the following submissions Commercial training and Coaching services 2.1 According to the definition of commercial training or coaching centre, only commercial training or coaching provided by a commercial training or coaching centre is to be treated as commercial training or coaching. AMA has received the amounts....
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....ations and not the ones like AMA. Further he also submits that the clubs invariably have a profit motto and AMA does not have any profit motto. He also submits that activities of the association are covered by the expression public services which is excluded from the taxable services. Convention services 2.3 Convention services became taxable with effect from 16-6-2001 and up to 1-5-2006 the service was liable to tax only when provided by any commercial concern and therefore arguments advanced by him about the nature of association being not of commercial concern are applicable and therefore AMA cannot be taxed for convention services prior to 1-1-2006 which is the period of dispute at present. He also drew our attention to the Circular F. No. B 11/1/2001-TRU, dated 9-1-2001 wherein it was clarified that conventions held by Chambers of Commerce and Industries for their members would not be liable to service tax and he submits that the association comes under this category. He also referred to the circular issued by the Board vide No. 86/4/2006-ST, dated 1-11-2006 wherein the Board had clarified that non-commercial concerns would not fall under the net of certain taxable services....
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....charged is much more than expenses also shows that the training provided is on commercial basis. She has also observed that on a scrutiny of their balance sheet for 3 years, it was found that the association has reported huge amounts as income in excess over expenditure which again supports the view that the services provided, are commercial in nature and association is earning profits from such services. She also relied upon the circular issued by the Board, vide No. 84/2/2006-ST. dated 19-9-2006 wherein the Board had clarified that merely because an organization has been treated as charitable trust, for the purpose of levy of service tax it need not have to be plainly treated the charitable trust but has to be examined independently. According to the definition of 'charitable', 'charitable' means "dedicated to a general public purpose, generally for the benefit of needy people who cannot pay for the benefits received". Further charity is defined as aid given to the poor or those suffering or the general community for religious, educational, economic, public safety or medical purposes. Therefore she has argued that in respect of the training or coaching services, it cannot be said....
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....ide the taxability of two services viz commercial training and coaching services and conventional service, the appellants have relied upon the decision of the Tribunal in the cases of Great Lakes Institute of Management Ltd. v. CST [2008]12 STT 296 (Chennai-CESTAT) (GLIML s case) and Institute of Chartered Financial Analysis of India v. CC&CE [2008] 17 STT 501 (Bang.-CESTAT) (ICFAI's case). In both these cases, the issue before the Tribunal was liability of management programmes conducted by the organizers to service tax. Further in terms of income also, we can see that there is a similarity between the appellants in the two decisions cited by the ld. Advocate and the present case. The appellants in all the three cases have made profits. Further in the case of Great Lakes Institute of Management Ltd. (supra), it was a limited company and also registered as a charitable trust. Normally the limited companies are considered to be profit oriented but the Tribunal held that what is required to be seen is the objectives of the organization and the utilization of the earnings. In all the three cases, the profits earned cannot be distributed among the members and in case of dissolution any....
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.... or supply agency service, commercial concern was a pre-condition for taxability whereas in this case in view of the words "any institute or establishment", commercial concern is not a pre-condition. This appears to be the correct interpretation. Further she has also considered the definition of 'charity and charitable trust' which also, we have to accept that it does not cover AMA by a strict sense of the term. 4.8 In the case of GLIML (supra), the Tribunal had taken a view that the programme conducted by them is actually classifiable as 'education' and not in the category of commercial training or coaching and therefore even though the certificates for MBA/PGPM issued to the students on successful completion of the courses are not recognized by law, the Tribunal took a view that it amounts to providing education and the provision of education by an institution will attract service tax only the institution is a commercial concern. The Tribunal in GLIML 's case (supra) came to the conclusion that since the GLIML is not a commercial concern, training or coaching rendered by it is not liable to service tax as commercial training or coaching. 4.9 While there is no dispute that AMA h....
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....nment. In terms of section 2(f) of the UGC Act also, the Universities are either recognized, notified as University either by Centre or State. The State Governments are competent to declare an institution as University. In certain case, certain institutes of higher learning are given the status of Deemed Universities. We have also gone through the course brochures. The brochures indicate a very broad imparting of education and not mere training or coaching in a particular field. The Commissioner and also the Special Counsel have stressed the point that there is not much difference between education and coaching or training. We do not agree. Education is a very broad term. Education is the overall development of body, mind, intellect. It is for the development of the personality of any person getting that education. But, training and coaching are narrow in scope. That is why, even in Board's clarification, which we will reproduce later, the example given is that of certain institutions coaching students for examinations like IIT Joint Entrance Exam or the medical entrance exam, etc. Such coaching or training centres have definitely a profit motive because they have to train the stud....
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....or a particular job or an examination are imparted. (vi) The diploma programmes/courses conducted by AMA amount to education or continuing education and not commercial training or coaching." 4.11 The next point that has to be decided is whether the AMA is liable to pay service tax on the membership fee received from the members of the club. Ld. Commissioner has held that AMA is providing various services to the members such as Training programmes, seminars, meetings etc. On the other hand the id. Advocate has contended that unlike a club or an association which provides recreational facilities and other services to the members, AMA does not provide any specific service. It has not been brought out by the revenue either in the adjudication order or during the hearing, the nature of specific services provided to the members in return for the fees which they paid. When a person becomes a member of the club or association, he has expectations from the club/association and these are invariably clearly defined. The member also knows that he is entitled to certain privileges as a member of the club or association and he is entitled to some services. There is no specific service which a ....