Indian School of Business Versus CCT, Rangareddy – GST
Service Tax
2019 (2) TMI 93 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 29-1-2019
Appeal No. ST/26693/2013 – A/30137/2019
Service Tax
Mr. M.V. Ravindran, Member (Judicial) And Mr. P. Venkata Subba Rao, Member (Technical)
Shri S. Thirumalai, Advocate for the Appellant.
Shri P.S. Reddy, Dy. Commissioner/AR for the Respondent.
ORDER
Per: P.V. Subba Rao.
1. This appeal has been filed against the Order-in-Original No. 22/2013- Adjn (Commr) ST – denovo dated 30.03.2013.
2. Learned counsel for the appellant takes us through the meandering course of events of this case. Initially, a show cause notice dated 27.09.2006 was issued to the appellant covering the period July, 2003 to March, 2006 which was followed by another show cause notice covering the period April, 2006 to March, 2007. After following due process, the lower authority confirmed the demand against the assessee under the category of '
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benefits of this notification.
3. Not satisfied with the order of the CESTAT, the appellant preferred an appeal before the Hon'ble Supreme Court vide Civil Appeal No.8787/2012 dated 18.11.2013 which is pending before the Hon'ble Apex Court. Meanwhile, the adjudicating authority, in pursuance of the CESTAT's Final Order No.514-520/2012, took up the matter for adjudication and decided it, vide the impugned OIO. He held that the benefit of exemption notifications Nos.09/2003-ST & 24/2004-ST are not available to the appellant. This impugned order covered the period July, 2003 to September, 2011.
4. The issue which falls for consideration is whether the appellant who provides training in management are covered by the definition of 'commercial training or coaching services' and consequently, whether the courses conducted by them are liable to be taxed as such. A related issue is whether the appellant is entitled for the benefit of notification Nos. 09/2003- ST and 24/2004-ST. If the appel
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e 'education' from 'training & coaching'.
* It has not been established that the degrees/certificates/diplomas issued by the other assessees (other than IFCAI) to their students during the relevant period were recognized by law. Acceptance of any such degree/certificate/diploma by any varsity or other institutions abroad cannot mean recognition thereof by Indian law. Thus a conspectus of facts presented to us would clearly disclose the real character of the assessees' activity – training or coaching for a consideration.
* The explanation to section 65(105)(zzc) of the Act has a very wide scope to encompass the activities of the assessees and render them eligible to service tax under section 65(105(zzc) of the Act.
* The decision of the Tribunal and this Court in Administrative Staff College of India and all other crucial decisions were rendered before the crucial retrospective amendment of section 65(105)(zzc) of the Act and, hence, are of no precedential value. The same is al
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ed in these cases.
6. The appellant's appeal against this order is pending before the Hon'ble Supreme Court. Therefore, the only issue to be decided now is whether the lower authority was right in denying the benefit of Notifications 09/2003 & 24/2004. The finding given by the lower authority in the impugned order on this point is as follows:
“15.2 In so far as the claim that ISB is a vocational training institute they reproduced the definition given in the notifications 9/2003 & 24/2004 and claimed that the syllabi and curriculum of the courses offered by them were so designed that the individuals who undergo these classes would be imparted specialized skills. In many instances they would get direct employment after these courses. They also enclosed the list of the individuals who were offered campus placements in the managerial cadres in reputed organizations with handsome salaries and perks. It is true that ISB has been imparting training in advanced management to enable the trai
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nd public sector for recruitment of the personnel. In fact, many of these institutions give utmost importance to campus recruitment by specially appointing Placement Officers to coordinate this task to achieve better results in securing jobs for their students. This aspect of getting direct employment soon after completion of studies/courses which are offered by these institutions cannot make them vocational institutes. They continue to be academic institutions with the distinction of being called and known as professional (like engineering, medicine, polytechnic, management) colleges and non-professional colleges offering pure and applied sciences, arts, commerce, etc., By no stretch of imagination they can be called as vocational colleges or institutes.”
7. The appellant also pleaded some additional grounds before the Commissioner as follows:
1) That the appellant had rendered educational services which cannot be classified under the category of 'commercial training or coaching se
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* Executive Education Programme (EEP); and
* Research Programmes & Fellow Programme in Management (Equivalent of Ph.D.)
f) These programmes were all taught by eminent academic experts. They also have set up Centres of Excellence with the areas related to business.
g) Indian Institute of Management in Ahmedabad and Bangalore also offer similar diplomas and programmes and have also obtained accreditation internationally similar to the ones from whom they have obtained the accreditation.
h) They also render the services of management consultant for which they have obtained service tax registration. Thereafter they also voluntarily got themselves registered with the service tax department under the category of 'commercial training or coaching services'. However, they later intimated the department that no service tax is payable by them on the PGP, EEP, PGPMAX courses but have been paying service tax under protest. The department investigated the matter and after more than a year is
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ssues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force.”
2. The intention of the legislation, as may be seen was to levy service tax on training or coaching which are commercial in character and the institution or the establishment undertaking the activity must essentially be a commercial concern. In 2006, CBEC has issued circular stating that institutions like IITs & IIMs cannot be called commercial concerns. Similarly, in the present case, ISB is also a non-profit making company and not a commercial concern. The appellant is engaged in imparting education and such education is clearly beyond the intention of the legislation. They registered as a company under Sec.25(1)(a) of the Companies Act as a not for profit company and they do not declare any dividend or distribute surplus of profit. In the case of Institute of Banking Personnel Selection v. CST, Mumbai [2007 (8) STR 579 (Tri-Mumbai)] it was held that the insti
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For the purposes of this notification,-
i. “vocational training institute” means a commercial training or coaching centre which provides vocational coaching or training that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;
ii. “computer training institute” means a commercial training or coaching centre which provides coaching or training relating to computer software or hardware;
iii. “recreational training institute” means a commercial training or coaching centre which provides coaching or training relating to recreational activities such as dance, singing, martial arts, hobbies.
2. This notification shall come into force on the 1st day of July, 2003 and shall remain in force upto and inclusive of the 29th day of February, 2004.
Notification No. 24/2004-Service Tax
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Govern
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ng centre' which provides vocational coaching or training that impart skills to enable trainee to seek employment or undertake self employment after such training or coaching. If their institute is held to be commercial training or coaching institute, then they would be covered by this definition of vocational training institute in the above two notifications. The type of courses which they offer are theoretical and practical skill based training in areas such as Analytical Finance, Entrepreneurship, Strategy & Leadership, Operational Management, Information Technology Management and Strategic Management.
11. Learned counsel for the appellant at this stage draws the attention of the bench to the order of the CESTAT-Hyderabad in the case of Institute of Chartered Financial Analysts of India [2018 (10) GSTL 444] in which on an identical case, it was held that service tax demands raised and confirmed by the lower authority in denovo adjudication denying the benefit of aforesaid two exemp
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f CESTAT-Bangalore has been challenged by the appellant herein in Civil Appeal No.8787/2012 and is pending before the Hon'ble Supreme Court. In view of the factual situation, we do not find it necessary for us to pass any order on this aspect or deviate from the view already taken by the CESTAT an appeal against which is before the Hon'ble Apex Court. As far as the second issue of the benefit of exemption notifications is considered, both these exemption notifications are available for 'vocational training institutes' which have been defined as in 'commercial training or coaching centre' which provide vocational coaching or training that imparts skills to enable the trainee to seek employment or undertaken self employment directly after such training or coaching. We cannot think of a more practical job or self employment oriented training or coaching than management courses conducted by the appellant. In respect of another appellant in Final Order No.514-520/2012, we have already held
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