TaxTMI 
TaxTMI 
2023 (10) TMI 1169
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..... Other writ petitions were de-tagged and heard separately and are being disposed separately. 4. The petitioner in this writ petition is aggrieved by the Order in Original No.27 of 2019 (ST) dated 29.10.2019 passed by the first respondent and consequential recovery order dated 06.10.2020 bearing reference O.C.No.170 of 2020 of the second respondent. 5. By the impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019, the first respondent has confirmed a sum of Rs. 1,19,85,616/- towards service tax due from the petitioner. Apart from service tax, interest under Section 75 of the Finance Act, 1994 and penalty under Section 78 of the Finance Act have also been imposed on the petitioner vide impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019. 6. Operative portion of the impugned Order in Original No.27 of 2019 (ST) dated 29.10.2019 passed by the first respondent reads as under:- ORDER I. I confirm the demand of Service tax of Rs. 1,19,85,616/- (inclusive of Cesses) (Rupees One crore nineteen lakhs eighty five thousand, six hundred and sixteen only) on the consideration received towards provision of Service of Affiliation/Recognition and Servi....
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....nmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore, 2022 (58) G.S.T.L. 27 (Mad.). In Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore, 2022 (58) G.S.T.L. 27 (Mad.), this Court has allowed the case of the petitioner therein except to the extent of renting of immovable property. 10. Like the Manonmaniam Sundaranar University, The Tamil Nadu Dr.MGR Medical University, Chennai and The Madurai Kamaraj University, the Petitioner is also providing services to various colleges seeking affiliation with it. Prior to affiliating colleges, the petitioner inspects the colleges and charge fees. At the time of renewal of the affiliation, the petitioner again inspects the colleges and charges a sum towards inspection for renewal of the existing affiliation. The petitioner also has immovable properties in its campus which have been rented out for various activities. 11. In all the three cases mentioned above, the Court has granted relief by holding that the service provided by the three above named Universities to their colleges, viz constituted colleges were not liable to tax under Finance Act, 1994. 12. The submissio....
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.... as it was outside the purview of charging provision under Section 66B for the service provided was in the negative list in Section 66D(l)(ii) of the Finance Act, 1994 as it stood with effect from 01.07.2012 up to its deletion on 14.05.2016. It is submitted that, the petitioner was thereafter eligible for exemption under the Mega Exemption Notification No.25 of 2012-S.T dated 20.06.2012 as amended from time to time. Hence, prayed for allowing the writ petition. 18. On behalf of the respondents, it was stated that the writ petition is devoid of merits and is therefore liable to be dismissed. It is submitted that the present writ petition was filed almost after a lapse of one year and eight days impugned on 21.10.2020 after the impugned Order-in-Original No.2 of 2019 (ST) was passed on 29.10.2019. 19. It is submitted that the writ petition is not maintainable in the light of the decision of the Hon'ble Supreme Court in Assistant Commissioner (CT) LTU, Kakinada &Ors. Vs. M/s. Glaxo Smith Kline Consumer Health Care Limited, 2020 (36) GSTL (305) SC. 20. A specific reference was made to paragraph 14 and 15, from the decision of the Hon'ble Supreme Court wherein it was he....
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.... time to time. It is further submitted that the decision cited by the learned counsel for the petitioner cannot be said to have attained finality as the department is in appeal. 27. It is submitted that none of the amendment to the Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended by the notification are relevant. 28. It is stated that earlier certain categories of services provided "to an educational institutions"or "by an educational institutions" were exempted from Service Tax. It is submitted that the service provided by the petitioner were however not exempted under the above notification. 29. It is submitted that vide Notification No.6/2014-S.T dated 11.07.2014, Entry No.9 of Notification No.25/2012-S.T dated 20.06.2012 was fully substituted. It is submitted that after Entry 9 of Notification No.25/2012-S.T dated 20.06.2012 was substituted with new Entry vide Notification No.6/2014-S.T dated 11.07.2014, renting of immovable property was deleted from the purview of exemption. Thus, the service provided towards affiliation or recognition to colleges or educational institution were not covered under the Mega Exemption Notification No.25/2012 S.T dat....
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.... the Karnataka High Court in Phoenix Plasts Co. v. CCE [Phoenix Plasts Co. v. CCE, 2013 SCC Online Kar 10432 : (2013) 298 ELT 481]. The logic applied in these decisions proceeds on fallacious premise. For, these decisions are premised on the logic that provision such as Section 31 of the 2005 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdiction or passed in excess of jurisdiction - by overstepping or crossing the limits of jurisdiction including in flagrant disregard of law and rules of procedure or in violation of principles of natural justice, where no procedure is specified. The High Court may accede to such a challenge and can also non-suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. However, if the writ petitioner choses to approach the High Court ....
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....ucation as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; iii......... With effect from 01.07.2012 *With effect From 11.07.2014 vide Notification No.6/2014-S.T dated 11.07.2014 (i)Services provided to or by an * educational institution in respect of education exempted from service tax, by way of,- (a)auxiliary educational services; or (b)renting of immovable property; (*substituted with the "provided to" vide Notification No. 3/2012-ST dated 1.3.2013.) Services provided,- a.............. b.to an educational institution, by way of .- i........... ii. ........ iii........... iv. services relating to admission to, or conduct of examination by, such institution; Definitions:- For the purpose of this notification, unless the context otherwise requires:- (oa)"educational institution" means an institution providing services specified in clause (l) of Section 66D of the Finance Ac, 1994 ( 32 of 1994) 37. The above definition of "education institution" in clause 2(oa) to Mega Exemption Notification in column II was further amended ....
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....y law for the time being in force means whatever be the Degree, Diploma, PG diploma, Professional Degree or Post Graduate Degree are concerned, in order to obtain such qualification, if education being imparted as a part of curriculum, that education shall be part of service for the purpose Clause 'l' for getting exemption. 15. When an educational institution is imparting education as part of curriculum for obtaining a qualification as stated supra, no doubt, such services are being exempted and in this context, there can be no quarrel from the revenue side also. 16. However, whether such kind of service of imparting education as part of curriculum for obtaining a qualification whether is rendered by the petitioner university is a question where, it is the stand of the revenue that, the university is not directly imparting any education except providing affiliation to the institution, but would not deal with imparting education to the students. Therefore, the activities of affiliation and allied activities like inspection etc., cannot be treated as imparting education by the educational institution concerned. 17. However, insofar as the said stand....
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....es, which may be services provided to the staff, services provided to the faculty, expanded services like transportation, boarding and lodging and other allied activities enabling the students as well as the staff and faculty to come to the institution and getting imparted the education. 19. In this context, sub-clause (iv) of clause 9 referred to above is so important, which says that, services related to admission or conduct of examination by such institution are exempted services. Here, the services rendered to admission is two fold, one is the admission being made for the students in a particular institution. However, such admission can be made legally by the said institution, only on the basis of the affiliation granted by the University, fixing the intake strength of each and every course for the particular academic year. Illustratively, if there is a class where the university has given permission/affiliation for 100 students, not even 101 students can be admitted by the college. Therefore, that admission of the students strictly relates to the affiliation granted by the university. Therefore, the affiliation activity is an integral part of imparting education for a....
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....herefore, it is the university, where, the facilitator is the college, where, the examination is being taken place and therefore, the word "conduct of examination", cannot have such a narrow and pedantic interpretation as has been given by the Advance Ruling Authority in their order dated 19.11.2020, which has been in fact, heavily relied upon by the respondent revenue. Therefore, this Court is not subscribing the said view given by the Advance Ruling Authority in their order dated 19.11.2020. 22. In this context, it is further to be noted that, the very Advance Ruling Authority in the said order in paragraph No.7.6. has also made it clear that, we do not part any opinion on the claim of the applicant that they extend such services to the institutions by extending the affiliation. Therefore, the said issue as claimed by the said university in the said ruling of the Advance Ruling Authority has not been answered and it has been kept open by stating the aforesaid that they do not want to express any opinion on such claim. Therefore, the claim made by the university on that aspect even though was indicated, the issue was kept open. In that context W.P.(MD)No.20502 of 2019 als....
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....ying service tax on the services provided by the petitioner institution under the heading renting of immovable property also, in the considered view of this Court, cannot be sustained. Therefore, on both aspects, the assessment and demand made by the respondent, in the considered view of this Court, is untenable and therefore, it is liable to be interfered with. 25. The alternative appeal remedy plea raised by the respondent also has been considered and in this context, the judgment of the Gujarat High Court has been placed for my consideration, where the Court has simply relegated the party therein to go before the appellate authority under Section 86 of the Finance Act. In my considered view, here, the issue is, whether the exemption claimed by the petitioner is tenable or not is the main question, where, already there has been a judgment by the learned Judge by order dated 22.02.2021, as referred to above, where certain area has not been considered, as the mega notification was not brought before the Writ Court and therefore, it normally cannot be resolved by the appellate authority under Section 86 of the Finance Act. Therefore, that kind of relegation of parties to th....
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....atories Ltd. vs. Union of India, 2011(273)ELT 0003 S.C. x. Commissioner of C.Ex. Chandigarh vs. Doaba Steel Rolling Mills, 2011(269)ELT 0298 SC xi. Pappu Sweets and Biscuits vs. Commissioner of Trade Tax, U.P.Lucknow,2004(178)ELT 0048 S.C xii.Commissioner of Central Excise, Pondicherry vs. Acer India Ltd., 2004(172) ELT 0289 S.C xiii.Commissioner of Cental Excise, Meerut vs. Kisan Sahkari Chinni Mills Ltd., 2001(138)ELT 0946 G.O.I xiv.Baidyanath Ayurved Bhawan Pvt. Ltd., vs. Excise Commissioner U.P., 1999(110)ELT 0363 S.C xv.Calcutta Jute Manufacturing Co. vs. Commercial Tax Officer, 1997(093) ELT 0657 S.C xvi.Mafatlal Industries Ltd., vs. Union of India, 1997(089) ELT 0247 S.C xvii.Aphali Pharmaceuticals Ltd. vs. State of Maharashtra, 1989(044) ELT 0613 S.C xviii.Shabian Abraham vs. Collector of Central Excise and Customs, 2017(050) STR 0241 S.C xix.M.P.Steel Corporation vs. Commissioner of Central Excise, 2017(050) STR 0205 S.C xx.Ranbaxy Laboratories Ltd vs. Union of India, 2012 (027) STR 0193 S.C 45. In Union of India vs.Wood Papers Limited, 1990 (47) ELT 500, the Hon'ble Supre....
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.... (a) auxiliary educational services; or (b) renting of immovable property 48. A reading of the above clarification indicates that the services provided by the petitioner to colleges for grant/renewal of affiliation was not in contemplation of the Parliament when it was introduced Section 66D(ii) by Finance Act, 2012 into Chapter V of the Finance Act, 1994 with effect from 01.07.2012. 49. The argument of the petitioner is that the services provided by the petitioner University to various colleges fell within the purview of the "negative" list as defined in Section 66D(l)(ii) of the Finance Act, 1994 as it stood between 01.07.2012 until its deletion in 2016 vide Finance Act, 2016 (28 of 2016) dated 14.05.2016 and therefore not liable to tax under Section 66B of the Finance Act, 1994 cannot be countenanced. 50. The further case of the petitioner, that the petitioner was later exempted under Entry 9 to Mega exemption Notification No.25/2012-S.T. dated 20.06.2012 as amended from time to time also cannot be countenanced. I shall explain the position in the ensuing paragraphs. 51. The Hon'ble Supreme Court has repeatedly held that the operation of the notification ....
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....ilarly, no service tax was payable under Section 66B of the Finance Act, 1994 on services falling under the "negative list" in Section 66D of the Finance Act, 1944. 56. With effect from 01.07.2012, there were two categories of "services" on which no service tax was payable. They are:- (1) those services which were in the negative list in Section 66D of the Finance Act, 1994 and are therefore outside the purview of the levy under Section 66B of the Finance Act, 1994, and (2) those services which were exempted under a notification issued sub-section (1) of section 93 of the Finance Act, 1994. 57. Thus, with effect from 01.07.2012, under Section 66B of the Finance Act, 1994, service tax was to be levied at the rate specified therein on the value of "services" other than the services specified in the "negative list" provided or agreed to be provided in the taxable territory by one person to another and concluded in as much as the manner as may be prescribed. 58. Section 66D(l) of the Finance Act, 1994 was introduced in 2012 vide Finance Act, 2012. Prior to its deletion vide Finance Act, 2016 (28 of 2016), Section 66D(l) of the Finance Act, 1994, read as under....
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....ification recognized, by any law, for the time being in force. 65. Therefore, to begin with the services provided by the petitioner did not fall within the purview of "negative list" as defined in Section 65B(34) read with Section 66D(l)(ii) of the Finance Act, 1994 and/or as amended by Notification No.9 of 2016-S.T dated 01.03.2016. Therefore, the contention of the petitioner that the petitioner was outside the purview of Service Tax levy under Section 66B of the Finance Act, 1994 is liable to be rejected. 66. Therefore, the above views expressed in Madurai Kamaraj University vs. Joint Commissioner, Office of the Commissioner of GST and Central Excise, Madurai referred to supra and the views expressed in Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore referred to supra require reconsideration. 67. I shall now turn may attention to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. To avail the benefit of Mega Exemption Notification No.25/2012-ST dated 20.06.2012, the petitioner should have during the period in dispute, satisfied the requirements of the conditions stipulated therein. 68. Once again, the decision of the K....
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....nsored by Government, or transportation of students, faculty or staff of such institution; 74. At the time of inception with effect from 1.7.2012, there was no definition for the expression "educational institution" in Mega Exemption Notification No.25/2012-S.T. dated 20.06.2012. 75. Unless, the affiliation service provided by the petitioner fell within the purview of definition of the expression "auxiliary educational services" as defined in clause 2(f) to the Mega Exemption No.25/2012- S.T dated 20.06.2012, question of the petitioner being eligible to exemption under Entry 9 to Mega Exemption Notification No.25/2012- S.T dated 20.06.2012 at the time of its inception with effect from 01.07.2012, cannot be countenanced. 76. For understanding, the expression "auxiliary educational services" as defined in clause 2(f) to the Mega Exemption No.25/2012- S.T dated 20.06.2012, clause 2(f) can be dissected and understood follows:- as any services provided whether to the students or the faculty, relating to, or, any other services which educational institutions:- i) imparting any skill, or ordinarily carry out themselves, but may obtain as outsourced services from any o....
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....heless represent the understanding of the Deparement. They are relevant as "contempory expositio of law. 81. In Commissioner of Trade Tax v. Kajaria Ceramics Ltd. - 2005 (191) E.L.T. 20 (S.C.), the Hon'ble Supreme Court held that the intention and purport of Notification have to be interferred from contemporary official statements as "contemporary expositio" and used as aids' to interpret even recent statutes. 82. In para 28, the Hon'ble Supreme Court held as under:- "28. Thus inCCE v.Andhra Sugar Ltd.[1989 Supp (1) SCC 144 : 1989 SCC (Tax) 162 : 1988 Supp (3) SCR 543] Mukharji, J. (as His Lordship then was) said: (SCC p. 146, para 5) "It is well settled that the meaning ascribed by the authority issuing the notification, is a good guide of a contemporaneous exposition of the position of law. Reference may be made to the observations of this Court in K.P. Varghese v. ITO [(1981) 4 SCC 173 : 1981 SCC (Tax) 293 : (1982) 1 SCR 629] . It is a well-settled principle of interpretation that courts in construing a statute will give much weight to the interpretation put upon it at the time of its enactment and since, by those whose duty has been to construe, ....
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.... is to be given to the text in which the intention of the law-giver has been expressed." 87. The service provided by the petitioner to various colleges while granting or renewing affiliation cannot be construed as "auxiliary educational services" in view of the above definition clause 2(f) to Mega Exemption Notification No.25/2012-ST dated 20.06.2012 with effect from 01.07.2012. Therefore, the contention of the petitioner that the petitioner was alternatively exempted from service tax under Mega Exemption Notification No.25/2012-ST dated 20.06.2012 with effect from 01.07.2012 for inception is misplaced. 88. The petitioner being a University recognized under the provisions of the UGC Act, 1956, has to be construed as an "educational institution". As an "educational institution", the petitioner would have been exempted from payment of service tax for renting out its "immovable property" for a brief period - till 1.4.2013. 89. The exemption for renting of immovable property was short lived. This exemption stood withdrawn in view of amendment to Entry 9 to Mega Exemption No.25/2012-S.T dated 20.06.2012 vide Notification No. 3/2013-S.T, dated 1-3-2013. 90. With effect from 1....
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....(iv) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended by Notification No.6/2014-S.T. dated 11.07.2014 would be applicable to the petitioner only if the services provided by the petitioner were "relating to admission to an "educational institution" for admission, or conduct of examination by such" "educational institution" as defined in definition clause 2(oa) to Mega Exemption Notification No.25/2012-S.T dated 20.06.2012. 96. In other words, only the service provided by the petitioner to colleges viz "educational institution" as defined in definition 2(oa) as amended by Notification No.9 of 2016-S.T. dated 01.03.2016 by way of services relating to admission to, or conduct examination by such educational institution alone were exempted. 97. Clause (l) of Section 66D of the Finance Act, 1994 itself stood omitted by Finance Act, 2016 (28 of 2016), with effect from 14.05.2016. The above deletion of clause (l) of Section 66D of the Finance Act, coincided with the amendment to Mega Exemption Notification No.25/2012-ST dated 20.06.2012 vide Notification No.9/2016-S.T dated 01.03.2016. The definition clause 2(oa) to Mega Exemption Notification No.25/2012-S.T ....
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....part of a curriculum for obtaining a qualification recognized by any law for the time being in force; vi)Education as a part of an approved vocational education course." 102. The service provided albeit for affiliation and renewal of affiliation of such educational institution and the amount charged by the petitioner towards such affiliation and renewal of affiliation during inspection cannot be termed as a service by way of service relating to admission to, or conduct of examination to an " educational institution" as defined in definition 2(oa) to Mega Exemption Notification No.25/2012- S.T dated 20.06.2012 as amended by Notification No.9 of 2016-S.T.dated 01.03.2016. 103. The above exemption in Mega Exemption Notification No.25/2012-S.T dated 20.06.2012 as amended from time to time was intended to exempt only those ancillary services provided by way of admission to, or conduct of examination by, to "educational institutions". There is no scope for expanding the scope of exemption. Even if meaning of the expression "service relating to admission to, or conduct of examination to an educational institution" is to be interpreted assuming there is an ambiguity in the languag....
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....he University Grants Commission Act, 1956 is not exempted for payment of Service Tax. Further, petitioner may affiliate a college viz., " educational institution" which provide educational services as a part of curriculum to its students for them to obtain a qualification recognized by any law for the time being in force. However, such services provided to educational institution as defined in definition clause 2(oa) to Notification No.25/2012-S.T dated 20.06.2012 will not apply to services provided by the petitioner to colleges/educational institution. 108. There could be affiliation after inspection or renewal of affiliation already granted after such inspection. There could be also decision not to grant affiliation after inspection or not to renew affiliation after such inspection. These are independent services provided by the petitioner which are "commercial" in nature and facilitate a private "educational institution" to provide education to students as a part of a curriculum for student/scholar to obtain a qualification recognized by any law for the time being in force. It is an independent business vertical carried by the petitioner which is a "service" not exempted and ....
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....ted 20.06.2012 as amended by Notification No.6/2014-S.T dated 11.07.2014 and Notification No.9/2016 S.T dated 01.03.2016 exempting service provided to an "educational institution by way of, service relating to admission to, or conduct of examination by such institution" was intended to cover the service provided by the petitioner. Therefore, there is no scope for either holding the petitioner was not liable to tax under Section 66B of the Finance Act, 1994 or was exempted under the said Notification. 114. In my view, there was no scope for expanding exemption to services provided by the petitioner to various colleges while collecting affiliation charges and other charges from colleges who had to comply with the conditions specified by the petitioner while granting affiliation. Similarly, there is no scope for exempting the petitioner from service tax for renting of immovable property after 1.4.2013. 115. The views in Madurai Kamaraj University vs. Joint Commissioner, Office of the Commissioner of GST and Central Excise, Madurai and Manonmaniam Sundaranar University vs. The Joint Director (GST Intelligence), Coimbatore, referred to supra as mentioned above would require a reco....