TaxTMI 
TaxTMI 
2026 (5) TMI 797
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....dia may, subject to fulfillment of eligibility conditions such as GMAT and visa requirements, join the second year MBA programme at Missouri State University. There is no financial obligation or revenue sharing between ISMS and the foreign university. 1.3 The Department was of the view that the first-year foundation course conducted by ISMS did not lead to an educational qualification recognized by law in India and hence fell under "Commercial Training or Coaching Service" as defined under Sections 65(26), 65(27) read with Section 65(105)(zzc) of the Finance Act, 1994. 1.4 Accordingly, Show Cause Notices were issued for various periods, proposing demand of service tax along with interest and penalties under Sections 76 and 77 of the Act. 1.5 The demands were confirmed by the Adjudicating Authority and upheld by the Commissioner (Appeals). Being aggrieved, the Appellant is before this Tribunal. 1.6 For the earlier period from April 2006 to March 2007, two Show Cause Notices were issued to the Appellant, culminating in Order-in-Original Nos. 61/2007 and 208/2007, confirming service tax demands under the category of Commercial Training or Coaching Service along with intere....
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....nt and advanced detailed submissions in support of the Appeal and the Ld. Authorized Departmental Representative Ms. Anandalakshmi Ganeshram, appeared for the Revenue and defended the Impugned Orders. 4. The Ld. Advocate Mr. M.N. Bharathi made the following submissions which are summarized as below: - 4.1 The Appellant is not a commercial coaching centre, but an educational institution run by a charitable society without profit motive; surplus, if any, is ploughed back into educational activities. 4.2 The expression "commercial" in Sections 65(26) and 65(27) qualifies the centre, not the activity. 4.3 ISMS is empowered to conduct Post Graduate Diploma courses under its Memorandum of Association since 1960; autonomy has been reaffirmed by UGC and University of Madras. 4.4 The ISMS certificate is issued under statutory authority of the Society and is legally valid. 4.5 The retrospective Explanation inserted in Section 65(105)(zzc) by Finance Act, 2010 applies only if the service first falls within Sections 65(26) and 65(27), which is not the case here. 4.6 Reliance is placed on decisions such as: - i. Indian School of Business v. CST - 2010 (17) STR 83 (....
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....certificates, diplomas or degrees recognized by law. 8.2 It is an admitted position that the ISMS certificate by itself does not confer an MBA degree. The degree is awarded only by Missouri State University upon completion of the second year abroad. 8.3 The Appellant's reliance on charitable status and lack of profit motive is rendered untenable in view of the retrospective Explanation inserted by Finance Act, 2010, which expressly provides that any centre imparting training for consideration is taxable, irrespective of profit motive or charitable character. 8.4 The decision in I2IT Pvt. Ltd [2014 (34) STR (TRI-MUM)] relied upon by the Respondent squarely covers the issue, holding that the services offered by I2IT were classified as "commercial coaching or training service" because the courses were not recognized by law during the period in question, making them liable for service tax. Therefore, The Appellant falls within the scope of Commercial Training or Coaching Service. Issue No. 2 Applicability of Retrospective Amendment: - 9.1 The Explanation to Section 65(105)(zzc) of the Finance Act, 1994, inserted retrospectively from July 1, 2003, clarifies that the le....
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....ance on Atul Ltd. v. CCE [2009 (246) ELT 744 (Tri.)] for the proposition that interest is a statutory consequence once tax liability is upheld is appropriate. 11.2 The decisions relied upon by the Appellant stand on a different factual and legal footing and do not advance its case. NON-APPLICABILITY OF ISB / GREAT LAKES LINE OF DECISIONS POST FINANCE ACT, 2010: - 12.1 We find that the line of decisions commencing from Indian School of Business [2010 (17) STR 83 (Tri.)], Great Lakes Institute of Management [2008 (10) STR 202 (Tri.)] and Administrative Staff College of India [2009 (14) STR 341 (Tri.)] were rendered prior to, or without considering the full effect of, the retrospective Explanation inserted to Section 65(105)(zzc) by the Finance Act, 2010. The said Explanation was specifically introduced to neutralize interpretational disputes and to clarify that the expression "commercial" is not dependent upon profit motive, charitable status or nomenclature of the institution, but solely on the fact of training or coaching being imparted for consideration. 12.2 Post the said retrospective amendment, the determinative test is no longer whether the institution is run on a ....