Custom, Excise & Service Tax Tribunal
Indian Institue Of Management vs Bangalore Service Tax-Ii on 30 April, 2024
ST/21157/2017
ST/20775/2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 21125 of 2017
(Arising out of Order-in-Original No. 47/2016-17 dated 19.04.2017
passed by the Commissioner of Service Tax, Bengaluru.)
Indian Institute of Management Appellant(s)
Bannerghatta Road,
Bangalore - 560 076.
VERSUS
The Commissioner of Service Tax-II
4th Floor, TTMC BMTC Bus Stand Building,
Respondent(s)
Old Airport Road, Domlur,
Bangalore - 560 071.
WITH
Service Tax Appeal No. 20775 of 2019
(Arising out of Order-in-Original No. 14 & 15/ST/COMMR./2019 dated
29.04.2019 passed by the Commissioner of Central Tax, Bengaluru.)
Indian Institute of Management Appellant(s)
Bannerghatta Road,
Bangalore - 560 076.
VERSUS
The Commissioner of Central Tax
Bangalore South Commissionerate,
Respondent(s)
C.R. Building, Queens Road,
Bangalore - 560 001.
APPEARANCE:
Shri N. Anand, Advocate for the Appellant
Shri Dyamappa Airani, Authorised Representative for the Respondent
CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL)
HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL)
Final Order No. 20378 - 20379 /2024
DATE OF HEARING: 01.01.2024
DATE OF DECISION: 30.04.2024
PER : D.M. MISRA
These two appeals are filed against respective Orders-in-
Original passed by the Principal Commissioner of Service Tax,
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Bangalore, since involve common issues are taken up together for
hearing and disposal.
2. Briefly stated the facts of the case are that the appellants are
providing taxable services viz., Management or Business
Consultancy Service, Manpower Recruitment or Supply Agency
Services, Event Management Service, Commercial Training or
Coaching Service and Renting of Immovable Property Service and
registered with the department. During the course of audit of their
records, it revealed that they are providing four long term
management programmes viz., Post Graduate Programme in
Management (PGP), Post Graduate Programme in Public Policy and
Management (PGPPM), Post Graduate Programme in Enterprise
Management (PGPEM) and Executive Post Graduate Programme in
Management (EPGP) and though fees are collected for the said
courses no service tax was paid on the same. Alleging that the said
courses provided by the appellant are taxable services in view of
statutory provisions viz., Commercial Training or Coaching Centre
services as defined under the provisions of Section 65(26), Section
65(27) read with Section 65(105)(zzc) of the Finance Act, 1994 for
the period up to 30.06.2012 and thereafter the said long term
courses satisfied the definition of 'services' as defined under Section
65B(44) of the Finance Act, 1994 with effect from 01.07.2012, and
the said service is not covered under the Negative List of the
services specified in Section 66D of the Finance Act, 1994 and also
not exempted under Notification No.25/2012, show-cause notice was
issued to them on 13.10.2015 demanding Service Tax of
Rs.39,00,85,171/- for the period 2010-2011 to 2014-2015 (Appeal
No.ST/21125/2017) with interest and penalty. The said show-cause
notice was adjudicated and the demand was reduced to
Rs.12,67,13,569/- with interest and equivalent penalty. Later, two
Statements of Demands(SOD), on the basis of same of facts were
issued for the period 01.4.2015 to 30.6.2017 (Appeal
No.ST/20775/2019) demanding Service Tax of Rs.3,79,03,096/-
which on adjudication confirmed with interest and penalty. Hence,
the present appeals.
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3. At the outset, the learned advocate for the appellant has
submitted that out of the four programmes on which the department
raised objections during the course of audit, the learned
Commissioner dropped the demand with regard to Post Graduate
Programme in Management (PGP) observing that the same is
exempted vide Notification No.9/2016-ST dated 1.3.2016 which was
also made applicable to past period as clarified by Board Circular
No.334/8/2016-TRU dated 29.02.2016. The demand in respect of
three other long term education programme/courses viz., PGPM,
PGEM, EPGP held to be liable to service tax on the ground that the
appellant had not adduced any evidence in support of their claim
that these courses have been recognized in law.
3.1 He has submitted that all these three long duration Post
Graduate Programmes are indeed "Post Graduate Diploma in
Management" which have been duly recognized by the Government
of India, Ministry of Education and Social Welfare (Department of
Education) vide Office Memorandum dated 25.07.1977 as also by
Association of Indian Universities (AIU), New Delhi vide
communication dated 17.05.1978. Further, he has submitted that all
these three diploma Education Programmes in dispute are duly
recognized and approved by the Government and the Governing
Body of the appellant which is controlled and supervised by Ministry
of Human Resource Development (MHRD). In support, they have
referred to the letter dated 08.07.2014 of the Secretary, MHRD
which is self-explanatory. It is his contention that in response to the
said letters by the Secretary, MHRD by Circular dated 29.02.2016, it
has been clarified that Post Graduate Programs in Management are
exempted in line with Sl. No.9B of the Notification No.25/2012-ST
and the said exemption being clarificatory in nature, the liability to
pay service tax in respect of said programs for the past period will
also become infructuous. He has submitted that in response to the
said Circular, the adjudicating authority dropped the demand of Post
Graduate Education Program and should have also dropped for other
three Post Graduate Education Diploma Programs as all the Post
Graduate Programs offered by all IIMs across India is covered by the
Circular dated 29.02.2016 and was specifically issued in the light of
the letter of Secretary, MHRD.
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3.2 He has submitted that PGPPM, i.e., Post Graduate Programme
in Public Policy and Management (PGPPM) is diploma course duly
approved and authorized and sanctioned by the Department of
Personnel Training (DoPT), Government of India. PGPPM is a diploma
course launched by DoPT in conjunction with the appellant under
United Nations Development Programme (UNDP), a capacity building
programme in public administration. It is a degree / diploma
recognized by Government of India for all its government officers
including IAS, IRS, IPS and other officers of the Central, State and
Union Territory Government. Referring to the Indian Institutes of
Management Act, 2017 passed by the Parliament, learned advocate
submits that under the said Act, it has been declared that the Indian
Institute of Management is of national importance as is evident from
the said Preamble of the enactment. He has submitted that the
Indian Institutes of Management Act, 2017 is a declaratory statute
and retrospective in nature. In support, he referred to the judgment
of the Constitution Bench of the Hon'ble Supreme Court in the case
of Central Bank of India vs. Their Workmen: AIR 1960 SC 12.
Further, he has submitted that every education programme including
the aforesaid were long duration education programmes are deemed
to have been recognized by law being diploma or education
qualification awarded by an Institute of national importance in terms
of Indian Institutes of Management, 2017. Therefore, all these three
long term Post Graduate programmes would fall under the category
of "Diploma or Degree or Education qualification which is recognized
by any law" as envisaged in Notification No.33/2011-ST dated
25.04.2011 as also Section 66D(I) read with Sl. No.9 and 9B of the
Notification No.25/2012-ST. Further, he has submitted that the issue
is no more res integra and is covered by the following cases:
• Indian Institute of Management, Ahmedabad vs. CST:
2019-TIOL-1879-CESAT-AHM.
• Indian Institute of Aircraft Engineering vs. UOI: 2012
(30) STR 689 (Del.)
• CCE vs. Garg Aviation Ltd.: 2014 (35) STR 441 (All.)
• ITM International Pvt. Ltd. vs. CST: 2017 (7) GSTL 448
(Tri.-Del.)
• IILM Undergraduate Business School vs. CCE: 2018 (10)
GSTL 345 (Tri.-Del.)
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3.3 Further, he has submitted that the learned Commissioner has
erred in confirming demand for the extended period of limitation
since there has been no suppression whatsoever on the part of the
appellant and the entire issue relates to bona fide interpretation of
statutory provisions and there has been clarification issued by the
Board from time to time including letters written by MHRD. In
support, he has referred to the following decisions of the Hon'ble
Supreme Court:
• Cosmic Dye Chemical vs. CCE: 1995 (75) ELT 721 (SC)
• Jaiprakash Industries Ltd. vs. CCE: 2002 (146) ELT 481
(SC)
• Continental Foundation Joint Venture vs. CCE: 2007
(216) ELT 177 (SC).
4. The learned Authorized Representative for the Revenue has
submitted that show-cause notices were initially issued demanding
service tax on 4 programmes viz., Post Graduate Programme in
Management (PGP), Post Graduate Programme in Public Policy and
Management (PGPPM), Post Graduate Programme in Enterprise
Management (PGPEM) and Executive Post Graduate Programme in
Management (EPGP) for the period commencing from 01.05.2011 to
31.03.2015. He has further submitted that following the Circular
No.334/8/2016-TRU dated 29.02.2016 consequent to issuance of
Notification No.9/2016 dated 1.03.2016, the adjudicating authority
dropped the demand against PGP but on comparison of the other
three programmes with PGP and Circular dated 29.02.2016
explaining the exemption of Service Tax, confirmed the demand
observing that these courses are not at par with PGP. He has
submitted that analyzing the course content retrieved from the
website of the appellant, it is clear that these programmes are to
impart training and further enhancement of experienced executives
and not any nature of curriculum making the students eligible to
receive employment on the basis of the certificate / diploma issued
by the appellant. It is his contention that therefore, the expression
education as a part of curriculum for obtaining a qualification
recognized by any law for the time being in force as interpreted in
Indian Institute of Aircrafts Engineers Case and Indian Institute of
Management, Ahmedabad case cannot be made applicable to the
facts and circumstances of the present case. Further, he has
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submitted that the Commissioner has rightly invoked the extended
period of limitation in confirming the demand for the period 2011-
2015. Also, he has submitted that for the period after 1.3.2016, the
exemptions since limited only to the course of PGP and Fellowship
Programmes, therefore, the demands were confirmed for the period
2016-17 and the Service Tax paid and appropriated cannot be
faulted with.
5. Heard both sides and perused the records.
6. The principal issue for determination is whether: (i) Post
Graduate Programme in Public Policy and Management (PGPPM),
Post Graduate Programme in Enterprise Management (PGPEM) and
Executive Post Graduate Programme in Management (EPGP) are
liable to service tax for the period 01.5.2011 to 30.06.2017 (ii)
demand dated 13.10.2015 is barred by limitation.
7. The learned Commissioner in the impugned order, referring to
the clarification issued by the Board on 29.02.2016 dropped the
demand for Two-Year full time Post Graduate Programme in
Management (PGP), however, confirmed the demand with regard to
three other programmes viz., PGPPM, PGPEM, and EPGP.
8. Before analyzing the findings of the learned Commissioner and
the arguments advanced by the learned advocate for the appellant,
the relevant applicable provisions as has been force and changed
from time to time during the period in question, is reproduced as
below:
Section 65(27) of the Finance Act, 1994
Commercial training or coaching (before 01.5.2005)
"Commercial Training or Coaching Centre" means any
institute or establishment providing commercial training or
coaching for imparting skill or knowledge or lessons on any
subject or field other than the sports, with or without
issuance of a certificate and includes coaching or tutorial
classes but does not include preschool coaching and training
centre or any institute or establishment which issues any
certificate or diploma or degree or any educational
qualification recognised by law for the time being in force;
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Commercial training or coaching (After 01.5.2005)
"Commercial Training or Coaching Centre" means any
institute or establishment providing commercial training or
coaching for imparting skill or knowledge or lessons on any
subject or field other than the sports, with or without
issuance of a certificate and includes coaching or tutorial
classes.
Section 65(105)(zzc): "taxable service" means any
service provided [or to be provided],--
to any person, by a commercial training or coaching centre in
relation to commercial training or coaching.
[Explanation.--For the removal of doubts, it is hereby
declared that the expression "commercial training or coaching
centre" occurring in this sub-clause and in clauses (26), (27)
and (90a) shall include any centre or institute, by whatever
name called, where training or coaching is imparted for
consideration, whether or not such centre or institute is
registered as a trust or a society or similar other organisation
under any law for the time being in force and carrying on its
activity with or without profit motive and the expression
"commercial training or coaching" shall be construed
accordingly;]
Notification No.33/2011 ST dt. 25.4.2011
In exercise of the power conferred by sub-section (1) of
section 93 of the Finance Act, 1994 (32 of 1994), the Central
Government on being satisfied that it is necessary in the
public interest so to do, hereby exempt,-
(i) any pre-school coaching and training;
(ii) any coaching or training leading to grant of a
certificate or diploma or degree or any educational
qualification which is recognised by any law for the time
being in force;
when provided by any commercial coaching or training
centre from the whole of the service tax leviable thereon
under section 66 of the Finance Act, 1994.
2. This notification shall come into force on the 1st day of
May, 2011.
Section 66D ( From 01.7.2012)
66D. Negative list of services: - The negative list shall
comprise of the following services, namely:-
(a) to (k) .......
(l) services by way of--
(i) pre-school education and education up to higher
secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a
qualification recognised by any law for the time
being in force;
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(iii) education as a part of an approved vocational
education course.
...........................................
Educational Institution is defined under Section 66D (oa) as:
"(oa) education institution means an institution providing services specified in clause (l) of Section 66D of the Finance Act, 1994:"
Notification No.9/2016 dated 01.03.2016 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 makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 467(E), dated the 20th June, 2012, namely :-
1. In the said notification, -
(a) in the first paragraph, - (i) ....................................
(ii) after entry 9A, the following entry shall be inserted with effect from 1st March, 2016, namely, -
"9B. Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme, -
(a) two-year full time residential Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management;
(b) fellow programme in Management;
(c) five-year integrated programme in Management.";
(iii) after entry 9B as so inserted, the following entries shall be inserted, namely :-
"9C. services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under Skill Development Initiative (SDI) Scheme;
9D. services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana under the Ministry of Rural Development by way of offering skill or vocational training 8 ST/21157/2017 ST/20775/2019 courses certified by National Council For Vocational Training.";
.......................................................
(b) in paragraph 2, -
(i) after clause (b), the following clause shall be inserted with effect from such date on which the Finance Bill, 2016 receives assent of the President of India, namely :-
'(ba) "approved vocational education course" means, -
(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or
(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship;
(ii) for clause (oa), the following shall be substituted with effect from such date on which the Finance Bill, 2016, receives assent of the President of India, namely :- (oa) "educational institution" means an institution providing services by way of :
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
(iii) education as a part of an approved vocational education course;";
(iii) .........................................
2. Save as otherwise provided in this notification, this notification shall come into force on the 1st of April, 2016. [Notification No. 9/2016-S.T., dated 1-3-2016]
9. The clarification issued by the Board dated 29.02.2016 on issuance of the said Notification reads as follows:
"7.14 Services provided by the Indian Institutes of Management (IIM) by way of 2-year full time Post Graduate Programme in Management(PGPM) (other than executive development programme), admissions to which are made through Common Admission Test conducted by IIMs, 5 year Integrated Programme in Management and Fellowship Programme in Management are being exempted from service tax.
7.15 It has been informed by Secretary, Ministry of Human Resource Development (MHRD) vide letter D. O. No. 2- 14/2009-TS.V, dated 8th July, 2014 and 5th February, 2014 that MHRD is vested with the power to recognise educational 9 ST/21157/2017 ST/20775/2019 courses [DoPT O.M. dated 8-1-1975], for the purpose of recruitment to posts under Government of India. It has been further stated by MHRD in their above-mentioned letters that IIMs have been conducting Post Graduate Programmes in Management and Fellowship Programmes which are equivalent to MBA and Ph.D degrees. It has been reiterated by Secretary, MHRD vide letter D.O. 3/5/2013-TS.V, dated 15-1-2016 that the IIMs have been conducting Post Graduate Programmes in Management and Fellowship Programmes which are equivalent to MBA and Ph. D degrees, respectively, (as also clarified by associations like Association of Indian Universities, Inter-University Board of India etc.). In view of this, the exemption being given to the above programmes of IIMs is clarificatory in nature and in view of the same, liability to pay service tax in respect of the said programmes for the past period will also become infructuous.
(New entry at S. No. 9B of notification No. 25/2012-S.T. refers)"
10. A simple analysis of the changes effected from time to time regarding applicability of service tax to educational courses/ programmes offered by Commercial Coaching or Training centres, it is clear that such services for the period prior to 01.5.2011, was institute specific, and thereafter it became course specific. It is held by the Commissioner in the previous proceeding that the Appellant is not a 'Commercial coaching or Training Institute', as defined under section 65(27) of Finance Act,1994 as one of the course offered by them is recognized by law. However, from 01.5.2011 the expression "but does not include preschool coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force" has been deleted and Exemption Notification No.33/2011 dated 25.4.2011 has been issued which became course specific viz., "any coaching or training leads to grant of certificate or diploma or degree or any educational qualification which is recognized by any law for time being in force" and such courses/programmes were exempted. In other words, if a Commercial Coaching or Training Institute provides both recognized and non-recognized courses, then non-recognized courses be leviable to tax. This is in line with the clarification issued by the Board Letter D.O. F. No. 334/3/2011-TRU, dated 25-4-2011 which reads as:
10ST/21157/2017 ST/20775/2019 "Commercial Coaching and Training
6. The revised definition is intended to bring into the tax net all unrecognized education(emphasis supplied) within its ambit irrespective of the fact whether the institute imparting the education is conducting any one or more course recognized by law. Accordingly, an exemption has been given to pre-school education and all education that leads to the award of a qualification recognized by law vide notification No. 33/2011-S.T., dated April 25, 2011."
11. This position continued till the insertion of negative list regime of service tax from 01.07.2012.
12. In the negative list under Section 66D of the Finance Act, 1994, it is prescribed as: "services by way of-
(i)...........................
(ii) education as a part of curriculum for obtaining a qualification recognized by any law for the time being in force";
(iii)..........................................
13. The learned advocate for the appellant vehemently argued that these three programmes are covered under the expression recognized by any law for time being in force. It is submitted that these are recognized courses by the DoPT and similar programmes have been approved by AICTE and Association of Indian Universities being equivalent to MBA degree, hence covered under the aforesaid expression.
14. The Commissioner on the other hand analyzing the communications/recognition of the association of Indian Universities, Ministry of Education, AICTE and analyzing the course contents of the three programmes referring to the website of the Appellant held that acceptance/approvals of the courses offered by the Appellant are limited to Post Graduate Programmes in Management (two years) being equivalent to MBA degree offered by universities and 5-year fellow programmes equivalent to Ph.D, but not to the said three courses/programmes. He has concluded that these three 11 ST/21157/2017 ST/20775/2019 courses/programmes being not covered under the aforesaid approvals/communications, nor find a place in the amending Notification No.09/2016 ST 01.3.2016, and also in the clarification issued by the Board dated 29.02.2016, therefore, neither exempted under Notification No.33/2011-ST dated 25.4.2011 for the period 01.5.2011 to 30.6.2012 nor under clause (l) of Section 66D of the Finance Act, 1994 from 01.7.2012 till 01.03.2016; also under the Notification No.09/2016-ST dated 01.03.2016. Further, the learned Commissioner has held that the benefit either under the said exemption Notification or clause (l) of Section 66D of the Finance Act, 1994 cannot be extended to the appellant as they failed to produce any evidence in support of their claim that these courses are recognized by law. The learned Commissioner recorded as :
"The above averment of the assessee is not in consonance with the clarifications issued by the Board which are meant for only the 2 year full time Post Graduate Programme in Management (PGPPM), admissions to which are made through Common Admission Test conducted by IIMs and 5 year Integrated Programme in Management and Fellowship Programme in Management."
15. Further, analyzing the courses curriculum viz., PGPPM, PGPEM, EPGP, he has held as follows:
"With regard to the three course, viz., PGPPM, PGPEM, EPGP, on plain reading of the above provisions and from the details gathered from IIMB website, it is evident that these courses conducted by IIMB are neither school education/vocational education courses, nor are they equivalent to MBA and Ph. D degrees and therefore, they would not fall under the negative list.
Consequently, from the foregoing, it can be clearly seen that the said courses do not fall under the purview of MBA or Ph.D courses for which exemption is available to IIMB. The PGPPM, PGPEM, EPGP courses offered by IIMB are clearly neither covered in the Post Graduate Programmes in Management nor the Fellowship Programmes which are equivalent to MBS and Ph. D degrees and hence outside the purview of the 12 ST/21157/2017 ST/20775/2019 clarifications issued by the CBEC and the New Entry at Sl. No.9B of Notification No.25/2012-S.T. which has come into effect from 1.4.2016 and Notification No.9/2016-ST dated 1.3.2016"
16. In the present proceeding no further evidence has been placed by the appellant to support their argument that these courses are recognized by any law; and certificates issued on completion of these courses/programmes can be used in seeking employment. On the other hand, they reiterated the argument advanced before the adjudicating authority and relied on the Office Memorandum dated 25.01.1977 of the Ministry of Education and Social Welfare (Department of Education), Govt. of India, and Communication dated 17.5.1978 issued by the Association of Indian Universities(AIU); also the letters dated 08.7.2004 & 15.01.2016 of the Secretary, Ministry of Human Resources Development (MHRD) and Board's Circular dated 29.2.2016 are cited in support of their argument that these three programmes/courses are recognized by law. It is further evident from their argument that since the Ld. Commissioner has dropped the demand against two years Post Graduate diploma in Management programme(PGP) following the circular dated 29.2.2016, he ought to have also dropped the demand for all the three other courses/programmes.
17. The expression "recognized by any law" in the context of Section 66D of the Finance Act, 1994 has been clarified by the Board in its Circular dated 28.08.2012 as follows:
"Vocational Education/Training/Skill development Course (VEC) offered by Govt. Institutions or local authorities excluded from Service tax -- Clarification Circular No. 164/15/2012-S.T, dated 28-8-2012 F.No. 356/17/2012-TRU Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Service tax - Vocational education/training course -
Regarding.
13ST/21157/2017 ST/20775/2019 Clarification has been sought in respect of levy of service tax on certain vocational education/training/skill development courses (VEC) offered by the Government (Central Government or State Government) or local authority themselves or by an entity independently established by the Government under the law, as a society or any other similar body.
2. The issue has been examined. When a VEC is offered by an institution of the Government or a local authority, question of service tax does not arise. In terms of Section 66D(a), only specified services provided by the Government are liable to tax and VEC is excluded from the service tax.
3. When the VEC is offered by an institution, as an independent entity in the form of society or any other similar body, service tax treatment is determinable by the application of either sub-clause
(ii) or (iii) of clause (I) of section 66D of the Finance Act, 1994. Sub-clause (ii) refers to "qualification recognized by any law" and sub-clause (iii) refers to "approved VEC". In the context of VEC, qualification implies a Certificate, Diploma, Degree or any other similar Certificate. The words "recognized by any law" will include such courses as are approved or recognized by any entity established under a central or state law including delegated legislation, for the purpose of granting recognition to any education course including a VEC.
(Emphasis supplied)
4. This Circular may be communicated to the field formations and service tax assessees, through Public Notice/Trade Notice. Hindi version to follow."
18. The said Circular is self-explanatory. It says that the course approved by any entity established under a Central or State law including delegated legislation for the purpose of granting recognition to any educational courses, be considered as 'recognized by law'. In other words, the courses offered needs to be recognized by any entity who is vested with authority to grant such recognition not necessarily AICTE or UGC.
19. The appellants heavily relied upon the judgment of Hon'ble Delhi High Court in Indian Institute of Aircrafts Engineers' case (supra). It is argued that the interpretation to the said expression 14 ST/21157/2017 ST/20775/2019 laid down by the Hon'ble Delhi High Court in the said case and later followed by the Tribunal in the case of ITM and Indian Institute of Management, Ahmedabad (supra), the three courses equivalent to Post Graduate Programme in Management (PGP) dropped by the Commissioner are deemed to be recognized by law being diploma or education qualification covered by the Notification No.33/2011 as well as the exception contained in the Negative List under Section 66D(l) read with Sl. No.9 and Sl. No.9B of Notification No.25/2012- ST dated 1.7.2012 as amended.
20. Before applying the said precedent to the facts of the present case in arriving at a finding whether the three courses offered are to be considered as recognized by law, it is necessary to read the principles of applicability of precedent laid down by the Hon'ble Supreme Court in the case of Collector of Central Excise, Calcutta vs. Alnoori Tobacco Products: 2004 (170) ELT 135 (SC), wherein it is held that:
"11. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton (1951 AC 737 at p. 761), Lord Mac Dermot observed :
"The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge."15
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12. In Home Office v. Dorset Yacht Co. [1970 (2) All ER 294] Lord Reid said, "Lord Atkin's speech......... is not to be treated as if it was a statute definition. It will require qualification in new circumstances." Megarry, J in (1971) 1 WLR 1062 observed:
"One must not, of course, construe even a reserved judgment of Russell L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways Board [1972 (2) WLR 537] Lord Morris said :
"There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case. "
13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper."
21. In Indian Institute of Aircraft Engineering case, their Lordships recording the facts of the case at para 3 observed as follows:
"3. It is inter alia the case of the petitioner :
(i) that the petitioner is an Aircraft Maintenance Engineering Training School approved by the DGCA for providing Aircraft Maintenance Engineering (AME) training and conducting examination as per the course approved by the DGCA under the Aircraft Act, 1934 (the Act) and the Aircraft Rules, 1937 (the Rules) and the Civil Aviation Requirements (CAR) issued by the DGCA under Rule 133B of the Rules supra;
(ii) that the petitioner issues a certificate approved by the DGCA to candidates who successfully complete the approved training curriculum and successfully pass the examinations as per the approved course syllabus;
(iii) that the DGCA fully controls such training institutes by prescribing syllabus, number of seats per session, manner in which the exam is to be conducted as well as the manner in which the certificate is to be issued, though the candidates get the Final Licence i.e. BAMEL from the DGCA after qualifying further examination conducted by the DGCA;
(iv) that though Service Tax in India was introduced in the year 1994 but commercial training or coaching services were brought under the Service Tax net only with effect from 1-7-
2003 by insertion of Clause 65(105)(zzc) in the Finance Act by making services provided by a commercial training or coaching centre in relation to commercial training or coaching as a taxable service;
(v) however vide Section 65(27), pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational 16 ST/21157/2017 ST/20775/2019 qualification recognized by law for the time being in force, was excluded from the meaning of commercial training or coaching centre;
(vi) that though Section 65(27) was amended with effect from 1- 5-2011 to remove the exclusion earlier provided to pre-school coaching and training centre or any institute or establishment which issues educational qualification recognized by law but vide Notification No. 33/2011-S.T., dated 25-4-2011 with effect from 1-5-2011, similar exemption was granted to pre- school and educational qualifications and training that are recognized by law and thus the scope of levy of the Service Tax remains the same even after the said amendment; and
(vii) that the Instruction dated 11-5-2011 is in contravention of Section 65(105)(zzc) read with Section 65(27) of the Act and Notification dated 25-4-2011 and the show cause notice and the demands raised on the petitioner for Service Tax are consequently liable to be quashed."
In the said factual matrix, analysing the applicability of the expression "recognised by law", their Lordships held as follows:
"23. The expression 'recognized by law' is a very wide one. The legislature has not used the expression "conferred by law" or "conferred by statute". Thus even if the certificate / degree/ diploma/qualification is not the product of a statute but has approval of some kind in 'law', would be exempt.
24. "Recognize' is defined, in the Black's Law Dictionary, 8th Edition as confirmation of an act done by another person as authorized, formally acknowledging the existence; and, in Concise Oxford Dictionary as acknowledging the existence, validity or legality of.
25. We are of the view that the Act, the Rules and the CAR, having provided for grant of approval to such institutes and having laid down conditions for grant of such approval and having further provided for relaxation of one year in the minimum practical training required for taking the DGCA examination, have recognized the Course Completion Certificate and the qualification offered by such Institutes. The certificate/training/qualification offered by Institutes which are without approval of DGCA would not confer the benefit of such relaxation. Thus, the certificate/training/qualification offered by approved Institutes, has by the Act, Rules and the CAR been conferred some value in the eyes of law, even if it be only for the purpose of eligibility for obtaining ultimate licence/approval for certifying 17 ST/21157/2017 ST/20775/2019 repair/maintenance/airworthiness of aircrafts. The Act, Rules and CAR distinguish an approved Institute from an unapproved one and a successful candidate from an approved institute would be entitled to enforce the right, conferred on him by the Act, Rules and CAR, to one year relaxation against the DGCA in a Court of law. The inference can only be one, that the Course Completion Certificate/training offered by such Institutes is recognized by law.
26. There can be no doubt that such recognition through the Rules framed as aforesaid and through issuance of CAR, is a recognition by law, which is defined in Black's Law Dictionary, 8th Edition as the aggregate of legislation, judicial precedents and accepted legal principles and the set of rules or principles dealing with a specific area of legal systems. The Rules and the CAR aforesaid dealing with aircrafts, there can be no doubt, are law. The Supreme Court in Narsingh Pratap Singh Deo v. State of Orissa
- AIR 1964 SC 1793 held that a law generally is a body of rules which have been laid down for determining legal rights and legal obligations which are recognized by Courts. Similarly, in R.S. Nayak v. A.R. Antulay - (1984) 2 SCC 183 it was held that law includes any Ordinance, By-law, Rule, Regulation, Notification, Custom or Usage having force of law. The Rules and CAR aforesaid have been enacted in exercise of legislative power as aforesaid.
27. The reasoning in the impugned Instruction dated 11th May, 2011 that because the qualification awarded by the Institute does not culminate in automatic issuance of license/authorization by the DGCA to certify the repair, maintenance or airworthiness of an aircraft and for which purpose a further examination to be conducted by the DGCA is to be taken, in our view mixes up and confuses, 'qualification' with 'a license to practice on the basis of that qualification'. An educational qualification recognized by law will not cease to be recognized by law merely because for practicing in the field to which the qualification relates, a further examination held by a body regulating that field of practice is to be taken. Immediate instance can be given of the qualification in the field of law. Though by amendment of the recent years, the right to practice law on the basis of the said qualification has been made subject to clearing/passing a Bar Exam to be held by the Bar Council of India, the same does not make the qualification of law not recognized by law. The recognition accorded by the Act, Rules and CAR supra to the Course Completion Certificate issued by the 18 ST/21157/2017 ST/20775/2019 Institutes as the petitioner cannot be withered away or ignored merely because the same does not automatically allow the holder of such qualification to certify the repair, maintenance or airworthiness of an aircraft and for which authorization a further examination to be conducted by the DGCA has to be passed/cleared."
22. Analysing the facts and principles laid down in the said case, it can easily be inferred that in the said case their Lordships have confronted with the issue as narrated in the facts are that the course issued by the Aircraft Maintenance Engineering Training School which has been approved by DGCA for providing Aircrafts Maintenance Engineering course whether could be considered to be covered under exclusion clause of definition of Section 65(27) before 1.5.2011 and after the date under Notification No.33/2011- ST dated 25.04.2011. Analysing the approvals given by the DGCA and the courses provided by the appellant a recognised institute, it has been held that the qualification acquired by the candidates even without a license to practice, definitely be considered as a qualification recognised by law. We do not find such circumstances present in the case in hand as all these three courses viz., PGPM, PGEM, EPGP are not meant for successful candidates to be eligible to apply for job after completion of the said Programmes. On the other hand, all these courses are designed to enhance the skill in the field of Management of particular field and meant for persons having work experience, not specifically recognised by an authority like DGCA, who designs the course and exercise supervision over the conduct of the course.
23. In ITM International Pvt. Ltd. vs. CST: 2017 (GSTL 448 (Tri.-Del.), the issue for consideration by the Tribunal was that various courses which are provided by the appellant therein lead to award of degrees by universities equivalent and at par with the undergraduate and Honours degrees of various universities. The degrees for the appellant's courses are awarded by University of London , Allahabad Agricultural Instituted(Deemed University) have been mentioned as equivalent to the corresponding degrees like B. Sc. And B.A. (Hons.) of University of Delhi and other universities in 19 ST/21157/2017 ST/20775/2019 the title "Equivalence of Foreign Degree". The department alleging that the degrees and diplomas are not awarded by the Appellant hence service tax is applicable on providing such courses. By Majority Order, it is held that the courses offered by the appellant and the degrees awarded by University of London , Allahabad Agricultural Instituted(deemed University) being recognised by the AIU, hence the coursed are not liable to tax.
24. In IILM Undergraduate Business School vs. CCE: 2018 (10) GSTL 345 (Tri.-Del.), the issues involved is that the course namely B.Sc(Hons) in Business Management Studies conducted by the appellant are recognised and degree is awarded by the University of Bradford, UK, whether liable to service tax for the period 1.7.2003 to 31.08.2009. After analysing the principle of law settled in this regard, the Tribunal held that the award of degree University of Bradford, UK be considered as recognised by law and hence, decided the issue in favour of the assessee.
25. Both the above said judgments are not relevant to the facts and circumstances of the present case as recognition of the courses conducted by the Institutes in India and recognised by Foreign Universities as equivalent to the degrees of Indian Universities, as the question here is whether all the three courses are recognised in law.
26. Similarly, in the case of Indian Institute of Management, Ahmedabad (supra), the Tribunal while analysing the courses offered and detailed in the facts at paragraph 7, held that the courses under dispute have been recognised by the Government as equivalent to other Degree/Diploma courses for the purpose of employment and higher education. It is not clear from the said findings as to which of the courses that have been recognised and placed for consideration by Tribunal. Hence, the said decision is not relevant to the present case and cannot of much help to the Appellants as all these three coursed are not recognized by the Govt.as degree/Diploma for the purpose of employment and higher education.
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27. In the present case, learned Commissioner has consistently recorded that evidence of recognition of the said three courses by any authorities empowered/authorized in this regard, who approve such courses, making the successful candidates eligible to get an employment or qualification, so as to establish that these programmes have been recognised by law, not produced by the appellant. In these circumstances, it is difficult to accept the contention of the appellant that since the learned Commissioner has allowed to drop the demands against one programme viz., PGP which is specifically approved, the same is automatically be applicable to other three courses and to be considered at par with the said PGP course.
28. The appellants have specifically referred to the letters addressed by the Secretary, MHRD on 08.07.2014 and 15.01.2016 to buttress their claim that theses courses also be covered, like PGP, since consequent to the said letters, the Notification No.25/2012-ST dated 01.07.2012 was amended by inserting Sl. No.9B to the said Notification with effect from 01.03.2016. The aforesaid contention deserves to be outrightly rejected in as much as reading para 7.14 and 7.15 of the said Circular, it is clear that while giving retrospective effect to the said Notification the exemption has been limited to the courses as are equivalent to MBA and Ph.D Degrees and not all graduate programmes. Thus, the three courses conducted by the appellant would not fall under the scope of the said exemption Notification No.33/2011-ST dated 25.04.2011 or the Negative List under clause (l) of Section 66D of the Finance Act, 1994. Besides, the appellant had commenced discharging Service Tax with effect from 01.03.2016 after insertion of Sl. No.9B and deletion of clause (l) under Section 66D of the Finance Act, 1994. The claim of the appellant that Indian Institute of Management Act, 2017 since acknowledges such institute as an Institution of national importance and therefore, all the courses offered by the institute should be exempted, in our opinion, also cannot be acceptable as no such provision has been brought to our notice mentioned in the said Act. On the contrary, the Service Tax levy on the subject has been delinked from the criterion of Institute with effect from 01.05.2011 and made course oriented. In these circumstances, we do not find 21 ST/21157/2017 ST/20775/2019 merit in the contention that the above three courses viz., Post Graduate Programme in Public Policy and Management (PGPPM), Post Graduate Programme in Enterprise Management (PGPEM) and Executive Post Graduate Programme in Management (EPGP) cannot be subjected to service tax during the period in question on the plea that the PGP course has been exempted from service tax.
29. On the issue of limitation in the first appeal No.ST/21125/2017, we find that there has been changes in the law frequently and clarifications issued by the Board. Accordingly, during the said period, the applicability of the Notification and clause (l) of the negative list rests on the interpretation of the provisions of law, therefore, alleging suppression of fact in our view cannot be sustained. Consequently, the demands be restricted to normal period of limitation. Since the issue involves interpretation of law, imposition of penalty is unwarranted and accordingly, set aside in both the appeals.
30. In the result, the impugned orders are modified by setting aside penalty in both the appeals and upholding the confirmation of demands with interest for the normal period of limitation. The appeals are remanded only for the limited purpose of determination of tax for the normal period of limitation with interest. Appeals are disposed of accordingly.
(Order pronounced in Open Court on 30.04.2024.) (D.M. MISRA) MEMBER (JUDICIAL) (R. BHAGYA DEVI) MEMBER (TECHNICAL) rv 22