Custom, Excise & Service Tax Tribunal
Icfai vs Cst, Bangalore on 24 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH REGIONAL BENCH AT HYDERABAD BENCH - DB COURT - I Appeal(s) Involved: ST/21377/2014, ST/21379-21381/2014 (Arising out of Order-in-Original No. 70/2013 Adjn. (ST) Commr (De-Novo) dated 31.12.2013 passed by CC, CE & ST, Hyderabad) M/s Institute of Chartered Financial Analysts of India M/s ICFAIAN Foundation M/s ICFAI University, Dehra Dun M/s ICFAI University, Tripura Appellant(s) Versus Commissioner of Service Tax, Bangalore Respondent(s) Appearance: Mr. G. Shivadas, Advocate for the Appellant. Mr. R. Narsimha Murthy, Superintendent (AR) for the Respondent. CORAM: HON'BLE Mr. M.V.RAVINDRAN, MEMBER (JUDICIAL) HON'BLE Mr. MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Date of Hearing: 08/09/2017 Date of Decision: ................ Final Order No. ____________________ [Order per: Mr. M.V.RAVINDRAN.] .
These four appeals are directed against order-in-original No. 70/2013-Adjn (ST) dated 31.12.2013. The details of appeals are as under:
Sl. No. Appeal No. Appellant Respondent
1.
ST/21377/2014 ICFAI CST, Bangalore
2. ST/21379/2014 ICFAIAN Foundation
-do-
3. ST/21380/2014 ICFAI University, Dehra Dun
-do-
4. ST/21381/2014 ICFAI University, Tripura
-do-
2. The relevant facts that arise for consideration are all the four appellants are registered with the various authorities as deemed private university and impart knowledge and offer various educational programmes at under-graduate and post-graduate levels; University Grants Commission has recognised them as university under UGC Act 1956. Show-cause notices were issued to appellants demanding service tax under the category of commercial training and coaching centre services invoking extended period of limitation with proposal to impose interest and penalties. The adjudicating authority by a common order-in-original No. 8/2006 dated 29.09.2006 confirmed the demand of service tax, interest and penalties but extended the benefit of cum tax to appellant. Appellant aggrieved by such an order preferred appeals before the Tribunal and the Tribunal disposed of the appeals by Final order No. 1221-1224/2008 dated 17.10.2008 holding in favour of the appellant. Revenue Authorities aggrieved by such an order filed appeal before the Honble Supreme Court of India. By Finance Act 2010, an explanation was introduced to the definition of commercial coaching and training centre with retrospective effect from 01.07.2003 which clarified the position as to the taxability of any society registered under Society or as a Trust will be liable to service tax. Noting the said retrospective amendment, the Apex Court by order dated 14.02.2011 remanded the matter to the Tribunal to examine the case denovo in the light of retrospective explanation inserted under Section 65(105) (zzc) with effect from 01.07.2003. Following the directions of the Apex court in the remand proceedings, the Tribunal by Final order No 514 to 520/2012 dated 31.07.2012 upheld the taxability of the services rendered by the appellants under Section 65 (105) (zzc) of the Finance Act but remanded the matter back for limited purpose of examination as to whether the appellants were eligible for exemption in terms of Notification No. 9/2003-ST dated 28.06.2003 on a plea made by appellant. Since there was an error in the said Final Order dated 31.07.2012, appellants filed an application for rectification of mistake which was disposed of by the Tribunal by Miscellaneous Order dated 23.07.2013 by rectifying the mistake which was apparent on the face of the record. Subsequently, the adjudicating authority took up the matter for denovo proceedings and by the impugned order-in-original confirmed the demands holding that appellants are not eligible for the benefit of Notification No. 9/2003-ST dated 20.06.2003 as amended by Notification No. 24/2003-ST dated 10.09.2004. Aggrieved by such an order, appellants are before the Tribunal.
3. Learned counsel after taking the Bench through the orders of the Tribunal, the Apex Court and the adjudicating authoritys impugned order submits that Tribunal in the second or final order has departed from the factual finding of the 1st order passed by them; subsequent final order of the Tribunal could not have concluded a different factual finding in as much as the same set of documents had already been examined and factual findings to that extent had been rendered in respect of as to whether the appellant would be university or otherwise. By looking at the various certificates issued by the appellants for the graduate and the post-graduate programmes. He would submit that the factual matrix which was examined by the Tribunal in the 1st Order and the 2nd Order was the same and hence it could not have been held by the Tribunal in the the 2nd Order for the appellants university. For this proposition he relies upon the decision of the Honble High Court of Allahabad in the case of Xerox India Ltd as reported at [2011(270)ELT 651(All)] wherein it was observed by the Honble High Court that conflicting decisions by coordinate bench of the CESTAT for same assessee on the same set of facts for the same period was not proper and set aside the second order of the Tribunal which took a different view. It is his submission that the observation of the Honble High Court of Allahabad would apply squarely in this case and the Tribunal could not have departed from the view expressed by the Tribunal in the 1st Order.
4. It is his further submission that the appellants were recognised by the law as a university and hence do not fall under the ambit of definition of commercial coaching or training centre and hence there is no service tax liability on them. It is also his submission that this view has been aptly gone into by the Tribunal in the case of CC, CCE & ST Vs Rai Foundation Colleges [2017(51)STR 50 (Tri-Hyd)] wherein a view was taken that commercial coaching or training institutes/colleges providing coaching or training which forms an essential part of a course or curriculum in their institute or establishment leading to issuance of any certificate/diploma/degree/educational qualifications recognised by UGC is eligible for exemption from payment of service tax. It is his submission that the benefit of Notification No. 9/2003 would be applicable in the case in hand as the students who undertake and complete the programmes of the appellants are offered jobs or can support their own business. For this proposition he would rely upon the decision of the Tribunal in the case of Ashu Export Promoters (P) Ltd Vs CST New Delhi [2012(25)STR 359(Tri-Del)] as affirmed by the Honble High Court of Delhi as reported at 2014-TIOL-379-HC Del; reliance is placed upon the decision of the Tribunal in the case of Actor Prepares Vs CST Mumbai [2014(33)STR 546 (Tri-Mum)] and WLC College India Ltd CST Delhi [2012(27)STR 377 (Tri-Del)] and finally in the case of Pasha Educational Training Institute Vs CCE & C & ST [2009(14)STR 481 (Tri-Bang)].
5. Learned A.R. on the other hand submits that the benefit of Notification No. 9/2003 is available only to Vocational Training Institute and not to appellants. He would read the order-in-original paragraph No. 9 (A) and submit that the said reasonings given by the adjudicating authority as also at Paragraph No 11 would apply in its full force in as much the term National Training Institute in common parlance did not include the various educational programmes that have been conducted by the appellants and CBEC Circular No. 59/08/03-ST dated 20.06.2003 indicate that vocational coaching and training would mean typing and short-hand institutes TV/vehicle repair training institutes, ITI, foreign language institutes. Institutes imparting knowledge of painting, dancing, martial arts classes are not taxable under the service tax and a meaning has to be given to the said circular with reference to the Notification No. 9/2003.
6. On a careful consideration of the submissions made by both sides and on perusal of records, we find that the adjudicating authority has in the denovo adjudication in paragraph No 8 has correctly brought out the limited demands by the Tribunal in the second final order and has proceeded to decide the issue.
7. The adjudicating authority in the order-in-original has held against the appellant for denying the benefit of Notification No. 9/2003-ST and 24/2004 only on the ground that appellant is not a vocational training institute. According to the term vocational training institute does not include various educational programmes conducted by the appellant in the field of management, finance, banking, insurance, accounts law etc. and the exemption notification has to be construed strictly for claiming the benefit of exemption; that definition of the word (skill) as per business dictionary etc will not cover various educational programmes conducted by the appellant.
8. As regards the submissions made by the learned counsel that the second order of the Tribunal needs to be set aside on the ground that on the same set of facts, the second order has held that the appellant is not a university. In our considered view we find that the second order of the appellant though appealed against by the appellant before the Apex Court, there is no stay of the said order. Hence, in our view, raising the question before the Tribunal again on the same issue and praying that the second order of the Tribunal be set aside seems to be a prayer made before the wrong Forum. In view of this we reject the submissions made by the learned counsel on this point.
9. We take up the second point raised by the appellant as to availability of benefit of Notification No. 9/2003-ST dated 20th June 2003 and Notification No. 24/2004-ST in order to appreciate the correct position as to the eligibility to avail exemption Notification. The said Notifications are reproduced:
[Notification No. 9/2003-S.T., dated 20-6-2003] In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services provided in relation to commercial training or coaching, by, -
(a) a vocational training institute;
(b) a computer training institute; or
(c) a recreational training institute;
to any person, from the whole of the service tax leviable thereon under sub-section (2) of section 66 of the said Act.
Explanation.- 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.
This notification shall come into force on the 1st day of?2. July, 2003 and shall remain in force upto and inclusive of the 29th day of February, 2004. [Notification No. 24/2004-S.T., dated 10-9-2004] In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services provided in relation to commercial training or coaching, by, -
(a) a vocational training institute; or
(b) a recreational training institute, to any person, from the whole of the service tax leviable thereon under section 66 of the said Act. Explanation. - For the purposes of this notification, -
(i) vocational training institute means a commercial training or coaching centre which provides vocational training or coaching that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;
(ii) recreational training institute means a commercial training or coaching centre which provides training or coaching relating to recreational activities such as dance, singing, martial arts or hobbies.
10. It can be seen from the above reproduced notifications that the explanation as to what is vocational training institute indicates that the said exemption can be extended to any vocational training institute which imparts skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching. It is nobodys case in all these appeals that for completion of the educational programmes conducted by the appellants, students are employed either directly by the employers or can seek self-employment. We find that in support of such a claim, appellants have enclosed a list of the students who were employed by various industries on successful completion of education programmes conducted by the appellants. In our view, there can not be any doubt as to the fact that the students successfully completing the educational programmes of the appellants are being selected for employment by various organisations. On this factual matrix, we find that the decision of the Tribunal in the case of Ashu Export Promoters Pvt Ltd., (supra) which has been affirmed by the Honble High Court of Delhi is covering the issue in favour of the appellant. We reproduce the said ratio:
11. It is evident that the term "vocational training institute" included the commercial training or coaching centers which provide vocational coaching or training meant to "impart skills to enable the trainees to seek employment or to have self employment directly after such training or coaching. The notion of such training institute having been recognized or accredited to nowhere emerges from such a broad definition. The further Notification of 2010 substitutes the existing explanation to the term "vocational training institute"and narrowing it to those institutes affiliated to National Council for Vocational Training offering courses in designated trade in fact supports the assessee . Had the intention been to exempt only such class or category of institutions, the appropriate authority would have designed such a condition in the original Notification of 2003 and Notification No.10 of 2004 which had been relied upon in this case. We also find that the coordinate bench of the Tribunal presided over by the Honble President in the case of Actor prepares Vs CST Mumbai [2014(33) STR 546 (Tri-Mum)] has also come to the same conclusion and we reproduce the relevant paragraphs.
5.?Admittedly, the assessee is neither an Industrial Training Institute or an Industrial Training Centre affiliated to the National Council for Vocational Training nor is offering courses in designated trades as notified under the Apprentices Act, 1961. The issue therefore is whether the petitioner which is admittedly vocational training institute and satisfies the criteria for exemption under Notification No. 24/2004-S.T., is yet disentitled to the benefit of the exemption. The adjudicating authority assumed that the assessee is not entitled to exemption from the liability to Service Tax, as the assessee did not satisfy the requirement of a vocational training institute as defined in exemption Notification No. 3/2010-S.T.
6.?In our considered view, this assumption by Revenue and by the adjudicating authority is fallacious and misconceived. The power to grant exemption, in the nature of an executive exercise of power is under Section 93 of the Act. The provision authorises no grant retrospective exemption or to alter the scope of an extant exemption retrospectively. In this view of the matter, exemption Notification No. 3/2010-S.T., dated 27-2-2010 can only have prospective effect and cannot alter the definition of the expression vocational training institute retrospectively. Vocational Training Institute as defined by Notification No. 24/2004-S.T., dated 10-9-2004 contains no such restrictive definition which requires affiliation to National Council for Vocational Training or the requirement of offering courses in designated trades as notified under the Apprentices Act, 1961, by an Industrial Training Institute or an Industrial Training Centre. It is impermissible for an authority conferred with the power to enforce provisions of the Act, to interpret the Act or exemption Notifications issued thereunder, by resorting to assumptions impermissible in law. For the aforesaid reason, the adjudication order is fallacious and unsustainable. It is accordingly quashed. The appeal is allowed. Similar views have been expressed by the coordinate bench of the Tribunal in the case of WLC College India Ltd [2012(27)STR 377(Tri-Del)] which has been upheld by the Honble High Court of Delhi as reported at 2015(38)STR J 207. In view of the foregoing, in the facts and circumstances of this case, service tax demands raised and confirmed in the denovo adjudication by denying the benefit of exemption notification for the period 1.07.2003 to 31.3.2005 is incorrect and unsustainable. Accordingly, the impugned orders are set aside and the appeals are allowed.
(Order pronounced on ..........................in open court) MADHU MOHAN DAMODHAR MEMBER (TECHNICAL) M.V.RAVINDRAN MEMBER (JUDICIAL) Neela Reddy 10