Custom, Excise & Service Tax Tribunal
M/S. Centre For Entrepreneurship ... vs Cce, Bhopal on 5 January, 2017
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing: 28.12.2016
Date of Decision: 05.01.2017
Service Tax Appeal No.57051/2013
[Arising out of Order-in-Original No.08/COMMR/ST/BPL-I/2013 dated 24.01.2013 passed by the Commissioner, Customs, Central Excise & Service Tax, Bhopal]
M/s. Centre for Entrepreneurship Development Appellant
Vs.
CCE, Bhopal Respondent
Appearance:
Rep. by Shri Sandeep Mukherjee, CA for the appellant. Rep. by Shri Sanjay Jain, DR for the respondent. Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Member (Technical) Final Order No.50046/2017 Per B. Ravichandran:
The appeal is against order dated 24.01.2013 of Commissioner of Central Excise, Bhopal. The appellants are an undertaking of Government of Madhya Pradesh, Public Financial Institutions and Leads Bank of State. They were registered with the Service Tax Department for providing taxable service like Commercial Training or Coaching, rendering of immovable property, Franchise Service and Management Consultant Services. Certain investigations were conducted against the appellant and the Department proceeded against them for short payment of service tax during the period 2003-04 to 2007-08. The impugned order was passed on completion of the adjudication proceedings. Service tax amount of Rs.4,44,39,518/- was confirmed against the appellant. Penalty of equivalent amount was also imposed under Section 78 of the Finance Act, 1994. Further, penalties were also imposed under Section 76 and 77 of the Act.
2. Ld. Counsel for the appellant explained the activities undertaken by the appellant. It is submitted that the appellant undertakes various training programmes under the Welfare Schemes of the Central/State Government like PMRY, PMREGP, MEGSET and many other such schemes. They are also involved in computer training, franchise network, manpower supply to various organizations, digitalization of data for Government Departments, providing education in collaboration with the Universities, renting out some of their premises to others.
3. Ld. Consultant appearing on behalf of the appellant submitted that the whole demand is very vague without any appreciation of facts. First of all, it is emphasized that the annual balance sheets of the appellant were taken and excluding interest income, all other incomes were considered as revenue on account of providing taxable services and accordingly the service tax demand was confirmed. He drew our attention to the enclosures attached to the show cause notice. Neither the show cause notice nor the impugned order anywhere mentions the taxable value, service-wise, for confirmation of demand.
4. On their tax liability under the category of Commercial Coaching or Training, ld. Consultant submitted that the appellant conducted courses in computer application, which results in awarding diploma/degrees in collaboration with BHOJ University of Madhya Pradesh. These are recognized degrees and as per MOU with the University, they are collecting the free and passing it on to the university. As such, they are not liable to service tax on such activity. It was also contended that any institute, which is imparting education for recognized degrees/training and also for competitive examinations and entrance tests, etc, the said institute is outside the purview of service tax liabilities. Reliance was placed on the Boards Clarification dated 20.06.2003. Further, the appellants were training the Government employees in upgrading their skills and the Government only pays grants in aid. Reliance was placed on the Tribunals decision in APITCO LTD. 2010 (20) STR 475 (Tribunal-Bang.) .
5. Ld. Consultant submitted that the bulk of the demand relates to appellants activity relating to various welfare schemes of the Central or State Governments, for which they are providing training for participants in skill upgradation. In respect of the demand for Business Support Service, it was contended that there is no support of business or commerce as their services were relating to Government Departments. Ld. Consultant further submitted that the appellant is a creation of the State Government closely connected with the implementation of various welfare schemes. The allegation of fraud, suppression with intent to evade service tax is not tenable with reference to the appellant.
6. Ld. AR reiterated the findings of the lower authorities. He also submitted that the appellant did not provide detailed break-up figures regarding their activities. In absence of such data, the Original Authority proceeded to decide the case based on the annual financial records of the appellant.
7. We have heard both the sides and perused the appeal records.
8. To begin with, we note that both the show cause notice and the impugned order dealt with the service tax liability of the appellant in a summary and perfunctory manner. Admittedly, the appellants were involved in providing various services. Further, it cannot be disputed that all their services are not falling under the category of taxable services. Specific reference can be made to Commercial Coaching or Training Service , under which the appellant was substantially put to liability. They were conducting courses resulting in award of recognized diploma or degree. Though the fee for the same is collected by them, the same is passed on to the university as per the MOU. Further, we also note that the training given to the Government servants in skill upgradation cannot be brought under the Commercial Coaching or Training. The activities of the appellants in connection with the implementation of various welfare schemes of the Government have not been examined in correct perspective by the Original Authority. Since there is no discussion at all regarding services-wise liability with clear quantification, activities-wise, the impugned order suffers from serious infirmity of vagueness and lack of application of mind. As already noted, the whole demand has been confirmed in a summary manner simply based on the annual balance sheet of the appellant with no detailed analysis of the various activities of the appellant along with the legal provisions for tax liability on execution of such activity for service tax purpose. We note that the impugned order as it stands cannot be legally sustained. As such, we set aside the same with a direction to the Original Authority to re-examine the issue categorically with supporting documentary evidence before arriving at the conclusion. We also note that the question of time bar of the demand requires clear finding considering that the appellant is a creation of State Government. In fact, we note that there is no finding in the impugned order regarding the applicability of the extended period in the present case. We also note that the appellants have not provided proper documentary support while submitting their defence before the Original Authority. As the matter is remanded back to the Original Authority for fresh decision, we direct the appellant also to submit all the required documents before the Original Authority for a fresh decision. Due opportunity shall be given to the appellant to present their case. Accordingly, the impugned order is set aside . The appeal is allowed by way of remand.
[Order pronounced on 05.01.2017.]
( Justice Dr. Satish Chandra) ( B. Ravichandran )
President Member (Technical)
Ckp.
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ST Appeal No.57051/2013