TaxTMI 
TaxTMI 
2023 (11) TMI 170
X X X X Extracts X X X X
X X X X Extracts X X X X
.... taxable under section 65(105)(zzc) of the Finance Act, with interest and penalty. 2. The Indian Institute claims to be a society registered under the provisions of the Societies Registration Act, 1860. It also claims to be recognized as a charitable organization under section 12AA of the Income Tax Act, 1961 [the Income Tax Act]. 3. The Indian Institute, which during the aforesaid period was engaged imparting education in the field of Postgraduate Courses in 'clinical research' in India, entered into collaboration with Cranfield University, UK [the UK University] under an Agreement dated 02.03.2006, titled as 'Postgraduate Clinical Research Courses Collaboration Agreement'. This Agreement was subsequently amended on 20.10.2008. Under the Agreement, the Indian Institute could conduct Post Graduation courses in clinical research of 2 years but the degrees were to be awarded by the UK University, which claims to be a University recognized under the UK laws. 4. During investigation by the department, it was noticed that that Indian Institute is engaged in providing 'commercial training or coaching' services as it conducts a course in clinical research in collaboration with UK Unive....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cial training or coaching', the Commissioner recorded the following findings: "11. I have elaborately discussed the meaning of the term/phrase "recognized by law" above. It does not require any further discussion except to say that the law related to educational qualification is governed and controlled by the University Grants Commission Act, 1956 or All India Council of Technical Education Act, 1987 as the case may be. The right of conferring or granting degree, under Section 22(1) of the Act of 1956 supra rests with a University established or incorporated by or under a Central Act, a Provincial Act or a State Act or an institution deemed to be a University under Section 3 of the University Grants Commission Act or an institution deemed to be a University under Section 3 of the University Grants Commission Act or an institution specially empowered by an Act of Parliament to confer or grant degree. Section 22(2) of the UGC Act clearly mandates that no person or authority shall confer, or grant, or hold himself or itself out as entitled to confer or grant, any degree. Thus, a degree or diploma or any educational qualification etc. granted or conferred by any person other than the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t for the appellant and the learned authorized representative appearing for the department have been considered. 15. To appreciate the contentions that have been advanced, it would be appropriate to examine the definition of 'commercial training or coaching' under the section 65(26) of the Finance Act as also the definition of 'commercial training or coaching center' under section 65(27) of the Finance Act so as to determine whether the services provided by the Indian Institute would be taxable under section 65(105)(zzc) of the Finance Act. 16. Section 65(26) of the Act, which was inserted w.e.f. 01.07.2003, defines 'commercial training or coaching' as follows : "65(26) 'commercial training or coaching' means any training or coaching provided by a commercial training or coaching centre." 17. 'Commercial training or coaching centre' has been defined in section 65(27) of the Finance Act and the said section, as it stood prior to 30.04.2011, is as follows : "65(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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tter portion not included in the definition of 'commercial training or coaching centre'. 21. The Indian Institute, as noticed above, is engaged in the field of imparting training in collaboration with the UK University. The degrees are awarded to the students by the UK University. The training that was imparted to the students was for consideration. 22. The contention of the learned Chartered Accountant for the appellant is that the Indian Institute was only imparting education to students in 'clinical research' and was not conducting any commercial or coaching activities. According to the learned Chartered Accountant, the said education was imparted under a curriculum/syllabus designed and approved by the UK University and after the completion of courses, students were provided degrees/certificates by the UK University duly recognised under UK laws. Learned Chartered Accountant also submitted that prior to 01.05.2011, the exclusion clause does not specify that the degree recognised under laws for the time being inforce would include only Indian laws and not foreign laws, and in any case the exclusion clause from the definition was omitted w.e.f. 01.05.2011. 23. It is not possib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in Section 65(105)(zzc) by Finance Act, 2010 with retrospective effect from 1 July, 2003. It provides that the expression 'commercial training or coaching centre' would include a centre or institute where training or coaching was imparted for consideration, whether or not such centre or institute was registered as a trust or society with or without profit motive. 24. Thus, it is immaterial whether the appellant is providing the taxable service on 'non-profit basis'." 30. The contention of the learned Chartered Accountant for the appellant that since the order passed by the Commissioner is an ex-parte order, it should be set aside as it violates the principles of natural justice cannot also be accepted. 31. The Commissioner had proceeded to adjudicate the show cause notices on the basis of the facts on record and the written submissions submitted by the appellant for the reason that despite repeated opportunities, the appellant and its representatives did not appear for personal hearing. The relevant portion of the order passed by the Commissioner dealing with this aspect is reproduced below: "Opportunity for personal hearing was granted on 28.10.2013. Since the noticee did ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rion of bona fide belief." 35. There is no error in the aforesaid finding recorded by the Commissioner. When the provisions of sections 65(26) and 65(27) of the Finance Act are so clear, the Indian Institute cannot claim to have formed a bonafide belief that it was not liable to pay service tax. 36. The contention of the learned Chartered Accountant for the appellant that penalty under section 77 of the Finance Act should be set aside also does not deserve acceptance. 37. Section 77 of the Finance Act provides penalty for contravention of any provisions for which no penalties are provided under Chapter V of the Finance Act. Under section 70 of the Finance Act, every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed. The Indian Institute had not filed the prescribed returns with complete and authentic details. Thus, penalty under section 77 of the Finance Act was correctly invoked. 38. In the end, learned Chartered Accountant submitted that the Indian Institute would be entitled to the f....