TaxTMI 
TaxTMI 
2023 (12) TMI 481
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....aken the benefit of the reduced penalty. 4.9.1 However, since the appellant had provided taxable service without obtaining Service Tax registration and had also contravened various statutory provisions of the Act, penalties under Sections 77(1) & 77(2) of the Act are imposable in this case. Thus, after taking into consideration the facts of the case, I hold that a total penalty of Rs. 10,000/- under both Sections 77(1) & 77(2) of the Act, is sufficient in this case." 2.1 Complain was received to the effect that: (i) the Punjab Technical University, Jalandhar, Punjab (a University established by an Act of State Legislature of Punjab), had appointed Master Companies/ Regional Learning Facilitation Centers across the county, for the purposes of their Distance Education Courses, (ii) these RLFC's had further appointed Learning Centres (LCs) who had signed Memorandum of Understanding (MoU) with the Punjab Technical University, Jalandhar, Punjab (PTU) on fee sharing basis, (iii) fees collected by the LCs were handed over to the PTU through RLFCs and the PTU after retaining their share and after deducti....
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.... (iii) Also, I impose a penalty of Rs 10,000/- upon the party under the provisions of Section 77(1) of the Act for failure to abide by the provisions of Section 69 of the Act, ibid. (iv) Further, I also impose a penalty of Rs 10,000/- upon the party under the provisions of Section 77(2) of the Act for failure to abide by the provisions of Section 69 of the Act, ibid. 2.5 Appellant had challenged this order before the Commissioner (Appeal), who by the impugned order dismissed the appeal. 2.6 Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Vijay Kapoor appearing for the appellant and Shri Santosh Kumar learned Authorized Representative appearing for revenue. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 Prior to 01.07.2012 Commercial Training and Coaching Services have been defined under Section 65 (26), 65 (27) and 65 (105) (zzc) which are reproduced bellow:- "Section 65(26): "commercial training or coaching" means any training or coaching provided by a commercial training or coaching centre. Section (27): "commercial training or coach....
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....the state of Punjab. It is clarified on 23.08.2013 by UGC that the degree awarded by PTU would be recognized only in the state of Punjab and as the learning center was located outside Punjab the benefit of award of degree cannot be extended to the appellant who is located in Varanasi. 4.4 Same things have been stated by the Appellate Authority in para 4.3-4.6 which are reproduced bellow:- "4.3 I also find that in the case of Prof. Yashpal & Anr. Vs. State of Chattisgarh & Ors in Writ Petition (Civil) 19 of 2004, the Hon'ble Supreme Court vide Order dated 11.02.2005, upheld the supremacy of the University Grants Commission Act, 1956 and the Regulations issued by the University Grants Commission under Section 26 of the University Grants Commission Act, 1956 over the State Acts and after taking into consideration the UGC (Establishment of and Maintenance of Standards in Private Universities) Regulations, 2003, (which, inter alia, allows a university established under a State Act to operate within the boundary of the State concerned), struck down Sections 5 and 6 of the Chhattisgarh Niji Kshetra Vishwavidyalaya (Sthapana Aur Viniyaman) Adhiniyam, 2002. 4.....
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.... Government was pointed out by a Constitution Bench in Azeez Basha v. Union of India AIR 1968 SC 662. 4.6 Thus, when the distance learning courses of the PTU offered by the appellant, were not recognized under the University Grants Commission Act, 1956 and the Regulations made thereunder, the degree/ qualification conferred upon the students on completion of such courses, cannot be considered as recognized. Thus, I find that the appellant were liable to pay Service Tax on the consideration received by them, for carrying out their aforesaid activity of conducting distance learning courses of the PTU." 4.5 Above observations made in the impugned order go contrary to the entire scheme of 'distance learning program' operated by various Universities across the country. In distance learning program the university is registered in a particular state and is awarded degree on that place. He prepares for that by going to any centre that being so, once someone deserves a degree or award by a university is goes out from the purview of the scheme by the University. The details in respect of the scheme of Distance Education Program of Punjab Technical University as available on their....
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....case of Prof Yashpal Relied upon by the Commissioner (Appeal) need to be examined. University Grants Commission vide Circular F.No.DEB/QMC/ 2013 dated 23.08.2013, conveyed that the "University Grants Commission, in terms of the Public Notice No. F 27-1/2012 (CPP-II) dated 27.06.2013, had notified its policy on territorial jurisdiction to be followed by all Universities/ Institutes and a University established or incorporated by or under a State Act would operate only within the territorial jurisdiction allotted to it under its Act and in no case beyond the territory of the State of its location." In our view the said circular do not in any way states that the degree conferred by the university will not be recognized outside the jurisdiction of the state. It is undisputed that Punjab Technical University has been constituted by the Act of State Legislature. The degree is conferred by the said university on the students who undergo the courses offered by the said university either by attending the residential programs or attending the courses through distance Education Program. The clarification or circular issued by the UGC do not bar the conferment of the degree by Punjab Technical....
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....nt, duly extended after following due process of law and amended and modified as per requirements of the distance education system of Punjab Technical University. The clauses contained hereinbelow shall override the clauses of the earlier agreement. WHEREAS the PTU, a University established under the Punjab Technical University Act, 1996, being Act No. 1 of 1997 of the Punjab State Legislature, is engaged, amongst other activities, in importing education under its Distance Education Programme (for short, "DEP") by running its distance education courses through the distant mode regulate by its own Distance Education Council (for short, "DEC") as a part of the "continuing education programmes" as authorised by Section 4(2) of the said Act No. 1 of 1997, through its own approved organs and outreach local centres called the LEARNING CENTRES, hereinafter referred to as the "LCs" duly set up and established at the chosen places by the PTU under separate letters of authorization issued by PTU, and each individual LC concerned is required to provide the requisite infrastructure for offering the various Courses of Information Technology and Management (for short, I.T.) and non-Info....
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....EES : 1.1 Mode of collection of fees by the LCs : The fees from the students shall be collected by the LCs (located within the entire allotted zone of RC) only by way of Demand Drafts drawn in the name of the Registrar, Punjab Technical University, Jalandhar, payable at Jalandhar, against proper receipts. 1.2 Collection of fees from the LCs : The RC will collect the fees from each LC located within its entire allotted zone. The RC will cross-check from the receipt books and the students enrolments records maintained by the LC concerned that all the Demand Drafts in respect of the fees collected from all the students enrolled and studying at the LC concerned have been accounted for and handed over to it. The RC will maintain a MIS as per form of EDP Cell of PTU. 1.3 Transmitting of fees to the PTU : The RC will then send all those Demand Drafts towards fees collected as above from all the LCs located within its allotted zone to the PTU. 1.4 Fees Sharing : Out of the total fees collected from the students and transmitted to the PTU by the RC as above, the fee shall be shared as follows between the PTU, RC and the LC : (1) Share of th....
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.... taken care of the interests of the students enrolled with the University. 2.3 Norms for Infrastructure & Facilities : The norms for infrastructure and instructional facilities as decided from time to time shall be enforced at each LC by the RC concerned within their zone and deficiency, if any, shall be reported to the University. Section 3 : EDUCATION AND DELIVERY PROCESS 3.1 List : It shall primarily include the following :- (1) Curriculum mapping. (2) Infrastructure planning. (3) Faculty planning. (4) Batch launch planning. (5) Assisting in curbing commercialization of education (6) Assisting in Monitoring activities (7) Invitation of registrations/enrolments-Marketing. (8) Taking registration (9) Course commencement. (10) Delivery of the course. (11) Conducting tests & preparing eligibility list for issuing certificates to the successful students. (12) Conducting soft skill training to students. (13) Conducting faculty training within their zone. (14) Any other matter/item at the sole discretion and with the prior app....
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....n the zone allotted to RC. Before officially closing the center, all student record files and "No Dues" must be submitted by RC to the University. (5) RC would be responsible for conducting the marketing/advertisement campaigns & strategies in print and electronic media for admissions and brand promotion of the courses of PTU in coordination with PTU. (6) To assist the PTU in the skill enhancement and quality control of entire system. (7) To maintain document and data control as well as authentic student data in prescribed formats and to make available such data and MIS to PTU within the stipulated deadlines. (8) RC will establish a placement assistance cell and liaise with industry through its experts & place students appropriately and maintain data of such placements. (9) To assist PTU in defending or fighting legal cases within the zone allotted to the RC. (10) To ensure timely delivery of course material, identity cards, etc. to LCs. (11) Coordinate efforts for preparing digital contents, CD's Learning Materials, MIS, and LMS, etc., for quality teaching-learning process within the allotted zone and for the overall d....
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....U in respect of any LC within the zone allotted to the RC. (25) The RC shall ensure that the learning imparted to the student covers comprehensively, the entire syllabus, as prescribed by the University within the specified time frame and strictly as per norms laid down or to be laid by the PTU. (26) The RC will have to perform any other functions or assist the PTU in the proper functioning of the LCs as and when called to so do by PTU. (27) The RC agrees to pay the necessary fee, i.e., as decided by the PTU for each Region/zone allotted to the RC. (28) The RC will ensure that all the various LCs under its zone comply strictly with their Obligations to the full satisfaction of the PTU. (29) The RC will follow, in letter and spirit, all rules and regulations, notifications, guidelines (whether issued to the RC or the LCs) and office orders of the PTU issued from time to time. 4.3 OBLIGATIONS OF LEARNING CENTRES (1) Each LC shall abide by all the terms and conditions laid down in the letter of its Authorization read with the guidelines issued by the PTU. (2) To establish and maintain infrastructure as per norms o....
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....OG) is presently valid for a term of 2.5 year(s) from the date of signing this MOU, with a provision of extension based on performance after proper evaluation, for the re-allotted zone falling in Zone "T". There shall be mid-term appraisal after 1.25 years and further extension or otherwise shall be decided. Section 8 : Withdrawal Clause : Any RC may withdraw from this MOU by giving a prior notice of withdrawal of three months to the PTU, which shall require acceptance by the PTU. Section 9 : Exit clause and provision of Natural Justice : The RC agrees that the PTU reserves the right to terminate the present authorization to the RC or to modify/restrict/terminates its zone of operation created under Section 7 of this MOU, by following the process of natural justice. It is clearly stipulated herein, and accepted and agreed to by the RC, that in case of any breach by the RC of any of the foregoing terms and conditions contained in this MOU, or for its unsatisfactory performance, or for non-performance, or for abandonment of the project or for any other reason or issue to be felt or determined....
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....the eligibility criteria for the faculty and staff to be engaged by LCs and the requisite norms to be implemented by LCs to ensure impart of quality education by LCs to the students enrolled by the appellant in authorised courses. Correspondingly, obligations of LCs, as mentioned in MOU reproduced above, clearly show that they have to abide by the terms and conditions specified in the MOU. The agreement clearly provides that LCs are duly authorised by the appellant to engage in providing training/education by offering appellant's various approved distance education courses of IT and non-IT streams and other related fields, strictly as per the commands and norms of the appellant to enable the students of the appellant enrolled with them to get skill based training leading to the award of degrees/diplomas of the appellant by the distance education mode in the concerned courses. The appellant ensures that LCs provide proper and quality education to the students of the appellant in accordance with the norms and standards laid down by the appellant for the skill based learning leading to the award of degrees/diplomas by the appellant in the concerned courses/streams through the distance....
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....In the present case also, a student is hardly much concerned as to which LC he joins because each LC provides education as per the norms and requirements laid down by the appellant and he gets a degree of and from the appellant. Ld. advocate referred to the judgment of Kerala High Court in the cases of Speed and Safe Courier Service v. Commissioner (supra) and Franch Express Network (supra). In the case of Speed and Safe Couriers Service (supra), the Hon'ble Kerala High Court found that double assessment of charges was made and held that there was no statutory provision to tax the same service charges twice. Thus, the ratio of this judgment has no relevance to the present case. In the case of Franch Express Network (supra) cited by the appellant, it was found that the agreement indicated that representational right was not granted (which is not the case in respect of the MOU under consideration). In case of Bonanza Speed Couriers (supra), cited by the appellant, CESTAT interpreted the definition of franchise as it existed prior to 16-6-2005 and therefore the said judgement is not germane to the issue in the present case. On the other hand, we find that the facts in the cas....
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....he amount paid to RCs by the appellant was an expense at the hands of the appellant in connection of provision of franchise service. For the sake of elucidation, for example, the appellant could as well have employed its own persons for doing what RCs did in which case the expenses incurred in doing so would not be deductible from the assessable value. Thus, the amount paid by the appellant to RCs is not excludible from the assessable value. 6. The appellant has contended that the extended period in this case is not invocable as there was no suppression or wilful misstatement. It stated that the figures asked for were also given within a month's time. We find that in the show cause notice, the invocation of the extended period is proposed in the following terms :- "13. The Noticee during the relevant periods neither got themselves registered with the Department nor paid the appropriate Service Tax on the services provided by them. The Noticee also did not file the returns prescribed as per law with the Department. Thus they have suppressed the fact of providing the taxable service from the Department with an intent to evade payment of Service Tax and h....
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....ression of facts inasmuch as in case of a bona fide belief regarding non-taxability, no assessee would file returns or obtain registration. In case of CCE v. Chemphar Drugs Liniments [2002-TIOL-266-SC-CX = 1989 (40) E.L.T. 276 (S.C.)], the Supreme Court held that "something positive other than mere inaction or failure on the assessee's part or conscious withholding of information when assessee knew otherwise is required for invoking extended period". Thus, we are of the view that the allegation of suppression of facts cannot be sustained in the given circumstances. Consequently, penalty under Section 78 ibid is not imposable." From the above decision it is evident that the transactions between the appellant have been held to be taxable under the category of Franchisee Services. If the service tax is now levied under the category of Commercial Coaching and Training Centre Service again the same will amount to double taxation under two different categories. Thus the decision holding that the services provided by the appellant are classifiable under the category of Commercial Coaching and Training Center Services is contrary to the above decision of Delhi Bench. 4.7 Tribunal in ....