Custom, Excise & Service Tax Tribunal
Sikkim Manipal University Of Health vs Commissioner Of Central Excise & ... on 14 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.ST/75010/2013
(Arising out of Order-in-Original No.11/COM/ST/SLG/12-13 dated 4.10.2012 passed by the Commissioner of Customs, Excise & Service Tax, Siliguri)
Sikkim Manipal University of Health
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise & Service Tax, Siliguri
Respondent (s)
Appearance:
Ms. Leena Rachh, CA for the Appellant (s) Shri S.S.Chattopadhyay, Supt.(AR) for the Respondent (s) CORAM:
Honble SHRI JUSTICE (DR.) SATISH CHANDRA, PRESIDENT Honble SHRI ASHOK K.ARYA, MEMBER (TECHNICAL) Date of Hearing:-14.12.2016 Date of Pronouncement:16.12.2016 ORDER NO.FO/A/76311/16 Per Shri Ashok K.Arya,
1. The present appeal is filed against the Order-in-Original NO. 11/COM/ST/SLG/12-13 dated 4.10.2012 passed by the Commissioner of Customs, Excise & Service Tax, Siliguri.
2. The brief facts of the case are that the appellant assessee is a statutory university located in Sikkim. The appellant is providing distance education with the approval by Distance Education Council (DEC), Indira Gandhi National Open University throughout India till 2013. After 2013, with the approval of University Grants Commission (UGC), the appellant is providing the distance education services throughout India and abroad.
3. During the period under consideration, the appellant has established, maintained learning centers (LCs)/Study Centres (SCs) for distance education in different parts of the country. For the said purpose they entered into an agreement with the private parties. Accordingly, they share the fees and also charge the accreditation/registration fee from each learning/study centre. The Department opined that only the accreditation fee is subject to service tax so they demanded the service tax. Being aggrieved the appellant assessee has filed the present appeal.
4. With this background Ms. Leena Rachh, CA, on behalf of the appellant, submits that as per the agreement between the learning centre and the appellant, no fee can be charged by the learning/study center. No student can be admitted by the learning center. It is only the appellant, who admits and charges fees in its own name through the banking channel and provide the guidelines for establishing learning and study centres, who are to have and provide qualified teachers and infrastructure. Recognition of the learning centre can be withdrawn at any time by the appellant. Every fee is charged by the appellant i.e. the appellant institution.
5. During the course of arguments Ld. CA/Counsel has drawn the attention to the Order-in-Original No.47-63/Pr.Commr/ST-I/KOL/2016-17, dated 22.08.2016, passed by the Revenue Department where the issue was discussed. In the said order dated 22.08.2016, it is mentioned that the appellant is empowered and is required, for the purpose of its Distance Education Mode, itself to establish and collaborate with study centers/learning centers in various parts of the country and abroad and is required to fulfill the requisite qualifications and comply with the Distance-Guidelines for regulating Establishment and Operation of Open and Distance Learning (ODL) Institutions in India 2006 issued by the Distance Education Council, IGNOU, New Delhi. It is also observed in the said order that Sikkim Manipal University (appellant) was set up to provide distance learning education which necessarily and inextricably involved outsourcing pertaining to the teaching and imparting of education; hence, degrees awarded by the Sikkim Manipal University through Distance Learning Centers are equivalent to degrees given through campus education. Thus a candidate will get the degree from Sikkim Manipal University. In the said order, it is also observed that Learning Centre was therefore providing all assistance to the University to help the University deliver its graduate and post graduate programs under the distance education mode.
6. It is the submission of the Ld. Counsel for the appellant that learning centers/study centers are not the franchisee of the appellant as wrongly observed in the impugned order. She has submitted that the relationship between the appellant and the study centers is established through the memorandum of agreement. No study center independently can take fees for admission on its own. In other words, it is the appellant, who charges the fees and admits the students and shares some parts of the fees with LC/RC but the said fee has not been brought into the clutches of the service tax by the authorities concerned. She submits that when the fee charged and shared is not subject to service tax, then merely accreditation fee amount cannot be charged to service tax.
7. On the other hand Shri S.S.Chattopadhyay, Suptd.(AR) has relied on the order of the lower authorities. He also submits that the issue is covered against the assassee as per the ratio laid down in the case of Punjab Technical University vs. Commissioner of Central Excise and Service Tax, Ludhiana [2016(42)S.T.R. 474 (Tri.-Del.)], where identical facts were discussed. In the said order, it was stated that students do not identify themselves with LCs but with appellant university only.
8. In the rejoinder, the Ld. Counsel for the appellant tried to distinguish the said case by stating that in the Punjab Technical University (PTU) case, there was joint venture agreement and not franchise agreement. The learning centers were at par with the affiliated colleges of the appellant, therefore, cannot be discriminated vis-`-vis affiliated colleges. In the PTU case, the university runs its own distance education programme through affiliated colleges and learning centers. She also submits that PTU regulates its own distance education as a part of continuing education programme through the learning centers. The Regional Centers (RCs) will have to issue the State level advertisements for admission notices for the courses in the leading news papers in coordination with the university. Regional Centers (RCs) will arrange to provide training for the latest technologies and teaching pedagogy to the staff of the LCs in coordination with the University.
9. But in the case of appellant, the learning/study centers are not authorized to make any advertisement in the news papers for admitting the students. The learning centers were not authorized to take students. Even infrastructure, faculty is to be regulated by the appellant. In the case of the appellant, the quality control will have to be provided by the appellant, so the case law cited by Revenue is not applicable to the instant case and is distinguished on facts and law.
10. By considering the rival submissions and the materials available on record, it appears that the case law cited by the Ld. AR, for the revenue i.e. Punjab Technical University vs. Commissioner of Central Excise and Service Tax, Ludhiana [2016(42)S.T.R. 474 (Tri.-Del.)] is not applicable and distinguishable on facts.
11. In the instant case, the department raised no demand of service tax on the fee shared by the appellant with the learning centers. Only the dispute is pertaining to accreditation fee while in the case of PTU, entire fee structure was the subject matter of the tax.
12. Moreover, the Punjab Technical University case has come after 2013, when the distance education was brought under regulation of the University Grants Commission. But during the period under consideration, the distance education was regulated by the Distance Education Council (DEC), IGNOU, Delhi which is an independent and distinguishable legal entity. The entire fee structure was brought to the net of service tax in the above case law (PTU) but it is not the Revenues case in the present case. When it is so then there is no justification to bring the accreditation fee to the service tax net. Hence, we set aside the impugned order.
In the result the appeal is allowed with consequential relief.
(Pronounced in the open court on 16.12.2016)
S/d. S/d.
(Ashok Kumar Arya) (Justice Dr. Satish Chandra)
Member (Technical) President
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1 Appeal No.ST/75010/2013