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Custom, Excise & Service Tax Tribunal

Eilm Foundation vs Kolkata-I on 2 May, 2025

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
             EASTERN ZONAL BENCH : KOLKATA

                       REGIONAL BENCH - COURT NO. 1

                 Service Tax Appeal No. 75218 of 2016
 (Arising out of Order-in-Original No. 11/COMMR/ST-I/KOL/2015-16 dated 23.11.2015
 passed by the Principal Commissioner of Service Tax-I, Kendriya Utpad Shulk Bhawan,
 3rd Floor, 180, Shantipally, Rajdanga Main Road, Kolkata - 700 107)


 M/s. EIILM Foundation                                              : Appellant
 6, Waterloo Street,
 Kolkata - 700 069

                                     VERSUS

 Principal Commissioner of Service Tax                           : Respondent
 Service Tax-I Commissionerate,
 Kendriya Utpad Shulk Bhawan, 3rd Floor,
 180, Shantipally, Rajdanga Main Road,
 Kolkata - 700 107


 APPEARANCE:
 Shri Arup Dasgupta, Advocate, for the Appellant

 Smt. K. Kalpana, Authorized Representative, for the Respondent


  CORAM:
  HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
  HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

                       FINAL ORDER NO. 76271 / 2025

                          DATE OF HEARING / DECISION: 02.05.2025

           ORDER:

[PER SHRI K. ANPAZHAKAN] The present appeal has been filed by M/s. EIILM Foundation, 6, Waterloo Street, Kolkata - 700 069 (hereinafter referred to as the "appellant") against the Order-in-Original No. 11/COMMR/ST-I/KOL/2015-16 dated 23.11.2015 (hereinafter referred to as the "impugned order") passed by the Principal Commissioner of Service Tax-I, Kendriya Utpad Shulk Bhawan, 3rd Floor, 180, Shantipally, Rajdanga Main Road, Kolkata - 700 107.

Appeal No.: ST/75218/2016-DB

2. The facts of the case are that M/s. Eastern Institute For Integrated Learning in Management (EIILM), 6, Waterloo Street, Kolkata - 700 069, now under a non-profitable charitable trust, namely, M/s. EIILM Foundation, a self-financed non-profitable charitable trust, is conducting various courses, undergraduate and post graduate management programme under the recognized universities. Prior to period 01.04.2012, the above institute was a part of M/s Malvika Foundation, Delhi, a public charitable trust.

2.1. The appellant institute conducts BBA (Hons.) and BMS (Hons.) programmes of West Bengal University of Technology (WBUT) as an affiliated institute and MBA/Post graduate management programmes of EIILM University, Sikkim. The appellant institute also acted as knowledge hub, training and placement centre of ElILM University, Sikkim and a learning centre for distance education programmes for Punjab Technical University, Punjab. Since the appellant is not engaged in any commercial business of offering courses and is a part of a non- profitable charitable trust, the appellant is not discharging service tax under the Finance Act, 1994.

3. A Show Cause Notice bearing No 39/KZU/KOL/ST/12/P-1(a)/2250-52 dated 22.04.2013 was issued to the appellant as well as M/s. Malvika Foundation for the period October 2007 to March 2013 in which it was alleged that the courses offered by the appellant are not approved by the University Grants Commission (UGC) and the appellant has no approval from All India Council for Technical Education (AICTE) during the material period. It was also alleged in the SCN that the Page 3 of 8 Appeal No.: ST/75218/2016-DB appellant, during the period in dispute, was acting as authorized knowledge hub, training centre & placement centre for EIILM University, Sikkim (EU) which is a private university established under an Act passed by Sikkim Legislative Assembly and thus the same cannot establish off campus centres outside the state of Sikkim as per the UGC Public Notice. Further, the appellant also allegedly acted as distance learning centre of Punjab Technical University (PTU) and PTU being a state university does not fall within the UGC Public Notice and also does not have its jurisdiction beyond Punjab State, As none of the courses offered by the appellant can be treated as recognized or approved by law, as alleged in the SCN, service tax is payable by the appellant under the category of "Commercial Training or Coaching Centre Service". Hence, it was alleged in the SCN that the receipts under the heads 'Income from MDP/seminar' would fall under the category of "Commercial Training or Coaching Centre Service', 'Income from Consultancy' would be categorized as 'Management Consultancy Service" and "Centre for conducting exams would fall under 'Event Management Service'. Accordingly, the said Notice proposed to demand Service Tax amounting to Rs. Rs. 11,74,95,655/- (incl. cess) for the period from October 2007 to March 2013, along with interest and penalties.

3.1. The above Notice was taken up for adjudication by the Ld. Principal Commissioner of Service Tax, Service Tax-I Commissionerate, Kolkata and vide the impugned order dated 23.11.2015 wherein the demand of Service Tax, as proposed in the Notice, was confirmed, along with interest and penalties.

Appeal No.: ST/75218/2016-DB 3.2. Aggrieved by the confirmation of demands against them in the impugned order, the appellant have filed the present appeal.

4. The Ld. Counsel appearing on behalf of the appellant submits that the courses offered by them are approved by the University Grants Commission (UGC) and the degrees/certificates so issued are also recognised by approved Universities. Accordingly, he contends that there is no Service Tax liability on them on account of the activity undertaken by them. In this regard, the Ld. Counsel for the appellant also informed that they are having all evidences with them to substantiate their claim that all the courses offered by them are approved by UGC, but admits that these details could not be produced before the ld. adjudicating authority.

4.1. It has also the appellant's contention that the Institute was under M/s. Malvika Foundation up to the period March, 2012 and thereafter, the Institute came under the control of the appellant (EIILM Foundation) i.e., from April 2012. Thus, it is their submission that out of the impugned demand raised for the period from October, 2007 to March, 2013, the demand pertaining to the period from October 2007 to March 2012, if at all payable, is recoverable from M/s. Malvika Foundation and the demand pertaining to the period from April 2012 to March 2013, pertains to the appellant, which is being contested by them in this appeal.

5. On the other hand, the Ld. Authorised Representative of the Revenue reiterated the findings in the impugned order.

Appeal No.: ST/75218/2016-DB

6. Heard both sides and perused the appeal records.

7. It is a fact on record that the Show Cause is an outcome of search and seizure, investigation by the DGCEI, in the premises of EIILM having no registration with Service Tax Department. In the impugned order, the ld. adjudicating authority observes that the taxability, on activities of EIILM, as alleged, were admitted and agreed by EIILM on the day of search and submitted postdated cheque for 1 Crore but later denied allegation along with withdrawal of the cheques issued. The fact is recorded in statements of the authorised personnels of EIILM as well as incorporated in the show cause notice.

7.1. It is also seen that M/s Malvika Foundation replied against said show cause notice vide letter 26.5.2013 and thereafter made several correspondences to the department but only let the department know on 31.7.2015 that "In the Year 2013, the trustees of Malvika Foundation came to know that Mr. Rama Prosad Bannerjee, the Director of EIILM Institute hatched a conspiracy with some faculty members of the institute and has taken unlawful control over the institute by creating a manufactured deed of donation and a purported trust i.e. EIILM Foundation.". In this regard, the respondent has alleged that such disclosure after a considerable period of time is unexplained but an afterthought and clearly an evidence of intention for suppression of facts previously by the EIILM and its controlling trustee, whoever it may be and thus disregarded the said letter.

Appeal No.: ST/75218/2016-DB

8. We also observe that Malvika Foundation is a public charitable Trust and during the impugned period, ran EIILM as an educational institution offering MBA courses from the Punjab Technical University (PTU) and the West Bengal University of Technology (WBUT). The PTU is recognized by UGC and degrees/diploma/certificates as issued by PTU are recognized in law. The PTU has appointed EIILM as the learning centre. Similarly, WBUT is also recognized by UGC and approved EIILM.

9. After considering the submissions made by the Ld. Counsel for the appellant and the facts available on record, we are of the opinion that the matter needs to be remanded back to the adjudicating authority for the purpose of examining the documentary evidence available with the appellant and thereafter to arrive at a conclusion as to whether the said courses offered by the appellant are recognised by the UGC and degrees issued to that effect are recognised by approved Universities or not.

9.1. We also take note of the appellant's contention that out of the demand of Rs.11,74,95,655/- (inclusive of cess) confirmed in the impugned order, they are only responsible for the demand of Rs.1,87,56,361/- pertaining to the period from April 2012 to March 2013. It is their claim that for the period from October 2007 to March 2012, the responsibility of the Institute was on M/s. Malvika Foundation and hence, the Service Tax liability to that extent is payable by M/s. Malvika Foundation. From the impugned order, it is evident that a collective demand of Rs.11,74,95,655/- has been demanded and no separate demand has been shown for the appellant and M/s. Malvika Foundation. Thus, there is Page 7 of 8 Appeal No.: ST/75218/2016-DB no break-up of the demand confirmed to indicate a separate demand recoverable from the appellant, if any. It has been stated by the appellant before us that M/s. Malvika Foundation was in charge of the university and had the responsibility for the courses undertaken by the Institute up to March, 2012, whereafter the appellant had taken over and offered the courses only from April 2012 onwards.

9.2. Taking note of the fact that there is no finding to this extent by the ld. adjudicating authority, we are of the opinion that this issue needs to be remanded to the adjudicating authority, for examining afresh and for recording a clear-cut finding in the order as to the liabilities of the appellant (M/s. EIILM Foundation) and M/s. Malvika Foundation, separately, if any. For this purpose also, the matter is remanded to the adjudicating authority.

10. In view of the above, the matter is remanded to the adjudicating authority with the following directions: -

(1) The adjudicating authority shall examine all the evidences submitted by the appellant so as to ascertain as to whether the courses offered are recognised by the UGC or not and whether the degrees/certificates issued are recognised by approved Universities or not.

(2) The Service Tax liabilities of the appellant (M/s. EIILM Foundation) and M/s. Malvika Foundation are to be categorically ascertained and the demand pertaining to each, if any, is to be determined separately.

Appeal No.: ST/75218/2016-DB

11. For these purposes, the impugned order is set aside and the matter is remanded to the adjudicating authority, for passing an appropriate order in accordance with law, in terms of our observations in the preceding paragraphs.

12. The appeal is disposed of by way of remand.

(Operative part of the order was pronounced in open court) Sd/-

(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-

(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd