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C.S.T. - Service Tax, Delhi and Ors. Vs. IILM Institute for Higher Education - (Customs, Excise and Service Tax Appellate Tribunal) (30 Jul 2018)

Institute in academics, cannot be presumed, to have a lack of clarity qua the language of legal provisions and respective notifications/circulars


Service Tax

The facts relevant in present case are that, IILM Institute of Higher Education is being run by a charitable society registered under Societies Registration Act and had been running various courses under the aegis of IILM University, Chhattisgarh. It is Department's case that, said university was disfunctioned vide Order of Apex Court dated 11th February, 2005 but still the Appellant was found running the above mentioned courses against collecting fees for providing the courses, resultantly, were alleged to have been providing the services of commercial training or coaching as defined under Clause 26 and 27 of Section 65 read with Sub-Clause zzc of Clause 105 of Section 5 of Finance Act, 1994. Since, the Appellant had not discharged their tax liability qua the aforesaid collected fee during the period March 2004 to March 2008 and also for the period April 2008 to August 2009, four Show Cause Notices were issued. Resultantly, the present Appeal is filed. Issue raised in present case is whether imparting of these courses by the appellants constitute rendering a service of commercial training or coaching centre.

No single document produced by the Appellants to show that, IILM has ever been recognized as deemed university by any of the universities constituted under law. Mere approval in their favour by any such government university for conducting certain courses by distant education or by permitting them to do so under convergence scheme cannot cloth them with the title of deemed university. The copies of degrees as produced on record shows that, the students getting education from Appellants have been granted degree by IILM i.e. Appellants only. The degree is not issued by the university constituted under the force of law. In the given circumstances and in view of the admitted fact that, IILM are charging heavy fee for rendering these courses, Tribunal is of opinion that, the adjudicating authority has not committed any error while holding the Appellant to have been rendering the services of commercial training or coaching centre. The demand to that extent is confirmed.

Vocational training institute is nothing but a commercial training or coaching centre and the Appellants have already been held to have been rendering commercial training or coaching centre services, there is no infirmity with the Order under challenge.

The Appellants are admittedly imparting education against heavy considerations. It is apparent on record that, they have tried to avoid their tax liability under different pleas i.e. on the ground of them being a charitable trust, another ground of them being a deemed university and of them being imparting education under the aegis of the bodies constituted under the force of law. None of the ground is opined favouring the Appellant's case.

The institute in academics, is otherwise cannot be presumed, from any stretch of imagination, to have a lack of clarity qua the language of legal provisions and the respective notifications/circulars. Therefore, question of Appellants being under any bona fide doubt does not at all arises. The intent of the appellants is very much apparent while submitting themselves to be entitled to exemption under certain Notifications which otherwise is not correct, that the same is mala fide. Therefore, the same is opined to be the mis-representation of the facts and is held to definitely be a willful and positive act on part of Appellant thereby entitling the Department to invoke the extended period of limitation.

The Apex Court in the case of Anand Nishikawa Company Ltd. Vs. Commissioner, has held that, suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade the payment of duty. The Appellants being an education imparting institute cannot be presumed to have acquired a wrong interpretation of the legal provisions or notifications or circular still taking the benefit thereof is definitely a deliberate non-disclosure of correct fact and as such suppression of fact. In view of these findings, impugned order to the effect of holding the Appellants to be under bona fide doubt while doing away the penalties is set aside. The Appeal of the appellants rejected and that of the Department allowed. Consequentially, the demand of the impugned order is confirmed alongwith the proportionate interest and penalty.

Relevant : Anand Nishikawa Company Ltd. Vs. Commissioner, Meerut MANU/SC/0641/2005 : 2005 (188) ELT 149 (S.C.)


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