Custom, Excise & Service Tax Tribunal
Indian Institute Of Management vs Service Tax - Kolkata on 4 March, 2024
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL,
KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Service Tax Appeal No. 70646 of 2013
(Arising out of the Order-in-Original No. 67/Commr/ST/Kol/2012-13 dated
25.02.2013 passed by Commissioner of Service Tax, Kolkata.)
M/s Indian Institute of Management, Calcutta,
Diamond Harbour Road, Joka Kolkata-700104.
...Appellant
VERSUS
Commissioner of CGST & Central Excise, Kolkata,
180, GST Bhawan, Shantipally, Rajdanga Main Road, Kolkata-
700107.
...Respondent
APPEARANCE :
Shri Rakesh Chhatbar, Chartered Accountant for the Appellant Shri J. Chattopadhyay, Authorized Representative for the Respondent CORAM:
HON'BLE MR. ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE MR. K. ANPAZHAKAN MEMBER (TECHNICAL) FINAL ORDER No. 75454 / 2024 DATE OF HEARING : 04.03.2024 DATE OF DECISION : 04.03.2024 PER K. ANPAZHAKAN :
The present appeal has been filed against the Order-in-Original No. 67/Commr/ST/Kol/2012-13 dated 25.02.2013 passed by Commissioner of Service Tax, Kolkata, wherein the Ld. commissioner has confirmed the demand of service tax of Rs.9,03,39,192/- along with interest and equal amount of tax as penalty. A penalty of Rs.10,000/- was also imposed under Section 77 of the Finance Act,1994.
2. The facts of the case are that M/s Indian Institute of Management, Calcutta (hereinafter referred as IIMC) are engaged in organizing management programmes which focuses on improving the skills of people in relation to business and management functions. The services provided by the Appellant by way of imparting skills in the field of business and commerce 2 Service Tax Appeal No. 70646 of 2013 fall under the category of 'Commercial Training or Coaching Service'. The Appellant paid service tax under the category of 'Management of Business Consultant Services' for a short period during April to September 2007, but did not discharge service tax thereafter. Accordingly, a Show Cause Notice dated 29.09.2011 was issued to the Appellant. On adjudication, the Ld. Commissioner vide Order-in-Original dated 25.02.2013 has confirmed the demand of service tax of Rs.9,03,39,192/- along with interest and equal amount of tax as penalty. Aggrieved against the confirmation of the demand of service tax, along with interest and penalty, the appellant has filed this appeal.
3. The Appellant submits that they conduct two-year full time management courses termed as Management Development Programme (MDP) and Long Duration Programme (LDP). The MDP and LDP programmes are essentially training programmes organized by IIMC in some specific disciplines. The Institute issues Diplomas/Degrees recognized by law and hence they are excluded from the definition of 'Commercial Training or Coaching services' as defined in Section 65(105)(zzc) of the Finance Act, 1994.
3.1. The Appellant referred to TRU letter No. D.O.F.334/3/2011 dated 28.02.2011 wherein it has been categorically clarified as under:
"Para 3.1 The levy in its present form keeps outside its purview unrecognized education which is imparted by an Institute that issues any certificate or diploma or degree or any educational qualification recognized by law. Thus two identical courses may be treated differently merely because one of the Institutes also conducts another course that is recognized by law. This anomaly is proposed to be corrected by subjecting all such unrecognized education to tax"3
Service Tax Appeal No. 70646 of 2013 3.2. The Appellant submits that from the above clarification issued by TRU, it is evident that Institutes conducting courses recognized by law were outside the scope of the levy.
3.3. The Appellant also cited the letter issued by Hon'ble Finance Minister wherein it has been clarified that "Once an Institute is issuing certain degrees or diplomas which are recognized by law, then its status as non-commercial training or coaching centre is established and the same would not alter even if it additionally provides coaching for certain unrecognized courses/degrees. Therefore, once an institute is excluded from the definition of Commercial training and coaching centre, the training and coaching provided by it would not fall under taxable service".
3.4. The Appellant further submits that the issue is no longer res integra as the Tribunal, Ahmedabad has decided the issue in the case of Indian Institute of Management, Ahmedabad vs Commissioner of Service Tax, Ahmedabad, vide Final Order No. A/10622-10623/2019 dated 01.04.2019 in Service Tax Appeal Nos. 10334-10335/2018-DB wherein it has been held that the long term courses of IIM are courses recognized by law and hence not liable to service tax under the category of 'Commercial training or Coaching Service.
3.5. In view of the above submissions, they prayed for setting aside the demand of service tax along with interest and penalty confirmed in the impugned order.
4. The Ld. Authorized Representative appearing on behalf of the respondent reiterated the findings in the impugned order.
5. Heard both sides and perused the appeal documents.
6. We observe that the Appellant has conducted the MDP and LDP programmes and issued Diplomas/Degrees recognized by law. As per the definition of 'Commercial Training or Coaching 4 Service Tax Appeal No. 70646 of 2013 services' as defined under Section 65(105)(zzc) of the Finance Act, 1994, the Institutes which issue diplomas/Degrees recognized by law are excluded from the purview of "Commercial Training or Coaching Services". This view has been clarified by TRU letter No. D.O.F.334/3/2011 dated 28.022011 wherein it has been categorically clarified that the levy in its present form keeps outside its purview unrecognized education which is imparted by an Institute that issues any certificate or diploma or degree or any educational qualification recognized by law.
6.1. We also find that Hon'ble Finance Minister has clarified that "Once an Institute is issuing certain degrees or diplomas which are recognized by law, then its status as non0commercial training or coaching centre is established and the same would not alter even if it additionally provides coaching for certain unrecognized courses/degrees. Therefore, once an institute is excluded from the definition of Commercial training and coaching centre, the training and coaching provided by it would not fall under taxable service"
6.2. We observe that the issue is no longer res integra as the Tribunal Ahmedabad has decided the issue in the case of Indian Institute of Management, Ahmedabad (supra) vide Final Order No. A/10622-10623/2019 dated 01.04.2019, wherein it has been held that the long term courses of IIM are courses recognized by law and hence not liable to service tax under the category of 'Commercial training or Coaching Service. The relevant paragraphs of the said decision are reproduced below: -
"7. In view of the above it is apparent that recognition by law does not mean recognition by AICTE or AIU etc., but it means recognition by government in any significant manners. In the instant case, the courses under dispute have been recognized by government as equivalent to other degree/diploma courses for the purposes of employment and higher education. Moreover, Ministry of HRD has clearly laid down in their letter dated 31.01.2017 that recognition by AICTE or NBA 5 Service Tax Appeal No. 70646 of 2013 accreditation is not required by IIMs. These facts have been affirmed by the letter of TRU dated 14.02.2017. Thus we hold that long term course of IIM are courses recognized by law. In view of that the demand does not survive on merits.
8. In so far as the issue of limitation is concerned, we find that the appellants were providing long term courses which were approved by Ministry as well as government for the purpose of higher education and for the purpose of jobs. It is also seen that during the period 2003 to 2010, even revenue was not sure about the nature of service which was intended to be taxed. This is apparent from various circulars issued by revenue and subsequently by retrospective amendment to the definition of commercial training or coaching centres. It is also seen that the appellants are premier organization. The appellant have also registered with service tax department, their account were being audited on annual basis. Earlier revenue has sought reversal of cenvat credit treating this service of long term training courses as exempted service. In this background, we find that there was not suppression and mis-declaration by the appellant. There was not malafide intention whatsoever, thus barred of the demand would also be liable to be set aside on account of limitation."
6.3. Accordingly, we hold that demand of service tax along with interest and penalty confirmed in the impugned order is not sustainable.
7. In view of the discussions and the decision of the Tribunal cited above, we set aside the impugned order and allow the appeal filed by the Appellant.
(Operative part of the order was pronounced in open court) Sd/- Sd/-
(K. ANPAZHAKAN) (ASHOK JINDAL)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Tushar Kr. / Sdd