2023 (10) TMI 529

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....60 w.e.f. 26.08.1963 as well as under Section 12 A(a) of the Income Tax Act, 1961. The Appellant was operating as an institution recognised under Section 80 G of the Income Tax Act. 1961 during the relevant period and the certificate to that effect has been annexed. To achieve its objective, Appellant got recognition from Punjab Technical University vide letter dated 11.08.2006 to undertake MBA programmes and to issue degree of PTU. Accordingly, appellant imparted education in Management subjects for MBA programme through its Shri Ram Institute of Management during the period 01.07.2003 to 31.03.2006 (relevant period). The fees received by Appellant from students during relevant period were not subject to levy of service tax as during the relevant period, positive tax regime was in force and only provision of service by way of Commercial training or coaching were brought under the tax net vide Notification No. 07/2003 dated 20.06.2003 w.e.f. 01.07.2003. 2.1 A Show cause notice dated 23.10.2008 was issued to the appellant proposing demand of Service tax of Rs. 7,59,270/- under Section 74, interest under Section 75, Penalty under Section 76 and 77 on the premise that the services pr....

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.... person, by a commercial training or coaching centre in relation to commercial training or coaching. He also submits that the usage of the word 'commercial' in the above definition clause created confusion on the issue, whether non-commercial institutions having no motive to earn profit should also fall under the taxable entry or not. To bring about clarity in the definition of commercial training or coaching centre, an Explanation was inserted by the Finance Act, 2010 on dated 08.05.2010. 3.3 Ld. Counsel further submitted that during the relevant period, in absence of any clarification, the Appellant was under the bonafide belief that no service tax is payable on the impugned services. For this submission, he relied upon the following decisions:- M/s Chanakya Mandal Pariwar vs. Commissioner of C. Ex., Pune-l; 2021 (44) G.S.T.L. 280 (Tri. - Mumbai) Pr. Commr. of Service Tax v. Shree Chanakya Education Society; 2018 (362) E.L.T. 741 (Bom.) Sri Chaitanya Educational Committee (SCEC) vs. C.C., C. E. & S.T., Guntur; 2016 (41) S.T.R. 241 (Tri. - Bang.) 12IT Pvt. Ltd. vs. Commissioner of Central Excise, Mumbai; 2014 (34) S.T.R. 214 (Tri. - Mumbai) National Institute of....

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.... 2005-2006 there were contrary decisions regarding whether the service tax is leviable on the Commercial Training and Coaching Service provided by non-profit and charitable institutions. Thereafter, the Tribunal by majority decision in the case of Sri Chaitanya Education Committee cited (supra) has held that the service tax is leviable in respect of coaching provided by the appellant through junior colleges under its management or under the management of others also. The majority view held that the extended period is not invokable and the demand is limited to the normal period of limitation. 5.2 Further, we find that the Larger Bench of the Tribunal in the case of Sri Chaitanya Educational Committee cited (supra) wherein the Larger Bench in paras 53 and 54 has held as under:- "53. In our opinion, for an institute to claim that it is not a 'commercial training or coaching centre', it must also be issuing certificates recognized by law for the time being in force. The appellant does not issue the certificates. In such circumstances, it is clearly a 'commercial training or coaching centre' providing 'commercial training or coaching'. It is providing a taxable service. All decisions....

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....batable issue before the decision in Sri Chaitanya Educational Committee (supra) was rendered on 1st June 2015. In fact reference of the above issue to a third member in Sri Chaitanya Educational Committee (supra) itself evidences that fact that prior to its decision, a party could have a bona fide belief that a charitable institution rendering the service of Commercial Training and Coaching is not chargeable to service tax under the Act. Thus, no fault can be found in the present facts with the impugned order of the Tribunal restricting the demand only to that extent of normal period of limitation and deletion of equivalent penalty under Section 78 of the Act. This as the Tribunal found on facts and on the basis of the law that the respondent was under a bona fide belief that no service tax is payable by a charitable institution rendering the service of Commercial Training and Coaching." 5.9 Further, the Tribunal in the case of British Airways vs. Commissioner of Central Excise (Adjn) Delhi - 2014 (36) STR 598 (Tri.-Del.) has held in Para 52 as under:- "52. I am also of the view that the demand, having been raised by invoking the longer period of limitation is hit by the provi....