Commissioner of Customs & Central Excise Vs Vikas Educational Institutions Ltd (CESTAT Hyderabad)
CESTAT Hyderabad held that imparting of coaching for competitive examinations such as IIT/JEE, AIEEE etc is a taxable service in terms of Section 65(26) of Finance Act 1994.
Facts- The present appeal has arisen out of show-cause notice vide which the demand of service tax of Rs.90,70,443/-, towards the liability of the appellant for allegedly rendering commercial training and coaching services during the period 1.7.2003 to 31.3.2005, was proposed. A differential service tax of Rs. 31,762/- was also proposed to be recovered from the appellant along with the proportionate interest and appropriate penalties.
The said show-cause notice was decided vide order-in-original confirming the said proposal. The order was challenged before CESTAT SZB, Bangalore. Vide Final Order the matter was remanded to the Commissioner for examining the issue denovo and to pass an order in accordance with law. The Tribunal also directed the appellants to produce all records as that of requisite ledgers etc. before the said adjudicating authority to show that the amount received by the appellant was not meant for providing Commercial Coaching Service and commissioner was required to pass an order after examining those records and the contentions of the appellant in accordance with law. Pursuant to said directions of remand that the order-in-original has been passed holding that the demand made against the respondent/assessee is not sustainable. Being aggrieved of the said order, Revenue is in appeal before this Tribunal.
Conclusion- There is no dispute that imparting of coaching for competitive examinations such as IIT/JEE, AIEEE etc is a taxable service in terms of Section 65(26)of Finance Act 1994, in view of the above discussion, we hold that the findings of Commissioners in Order under challenge are in total ignorance of the evidence on record rather are held to be purely presumptive and is based on the probabilities to just accept the submission in defence. On the contrary, the taxable services were being admittedly imparted and VES was not competent to impart these things. VEIL though is admitted to be interdependent/same organizations as that of VES, but we hold that it is VEIL which was providing taxable service as that of Commercial Coaching against collecting an amount in the name of tuition fee. Hence we hold that the demand of service tax for providing taxable/commercial coaching services against VEIL has wrongly been dropped by the Commissioner.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
The present appeal has arisen out of show-cause notice No. 1/22/2005 dated 12.4.2006 vide which the demand of service tax of Rs.90,70,443/-, towards the liability of the appellant for allegedly rendering commercial training and coaching services during the period 1.7.2003 to 31.3.2005, was proposed. A differential service tax of Rs. 31,762/- was also proposed to be recovered from the appellant along with the proportionate interest and appropriate penalties. The said show-cause notice was decided vide order-in-original 03/2007-08 dated 30th May 2007 while confirming the said proposal. The order was challenged before CESTAT SZB, Bangalore. Vide Final Order No. 1140/08 dated 14/08/2010 (Inclusive of stay order 991/08) the matter was remanded to the Commissioner for examining the issue denovo and to pass an order in accordance with law. The Tribunal also directed the appellants to produce all records as that of requisite ledgers etc. before the said adjudicating authority to show that the amount received by the appellant was not meant for providing Commercial Coaching Service and commissioner was required to pass an order after examining those records and the contentions of the appellant in accordance with law. Pursuant to said directions of remand that the order-in-original 21/2010 dated 10th May 2010 has been passed holding that the demand made against the respondent/assessee is not sustainable. Neither interest was levied nor penalty was imposed. Being aggrieved of the said order, Revenue is in appeal before this Tribunal.
2. We have heard Shri P.Amaresh, learned Authorized Representative for the appellant/Revenue and none appeared for the Respondent assessee Shri P. Amaresh learned A.R. appearing on behalf of the appellant/department has submitted that the impugned order-in-original has been examined by a Committee of Chief Commissioners who have found the order not to be legal and proper for the reasons as were stated by the committee in Order No. 25/2010 dated 23.08.2010. It was observed in the said order that the assessee/respondent was found receiving income in the nature of application fee, admission fee, coaching fee etc. The amounts received under those heads were also found mentioned in the annual returns of the assessee and the assessee/respondents were receiving payments on their own behalf. If any fee was received by Vikas Educational Society (VES) separate receipts found to have been issued. Assessee respondent himself had admitted Vikas Educational Institutions Ltd (VEIL) to be an interdependent organization of Vikas Educational Society (VES) for providing infrastructural facilities to VES. But payments have been received in the name of coaching fee/tuition fee by both the entities VES and VEIL though against separate receipts. It is impressed upon that the same was sufficient proof to the fact that M/s VEIL were rendering commercial coaching services which is taxable, but the respondent assessee has failed to discharge its liability towards the said service. It is finally submitted that Commissioner has apparently failed to appreciate the fact that both VEIL & VES are one and the same. They have merely forged bills in order to evade payment of duty. Hence, the order holding that VEIL is not liable to pay service tax is liable to be set aside. Appeal is accordingly prayed to be allowed. Revenue relies on the following case laws:
1) Sri Chaitanya Educational Committee Vs CCCE & ST Guntur [2019-TIOL-2286-CESTAT-HYD-LB]
2) CC Mumbai Vs M/s Dilip Kumar & Company & Ors [2018-TIOL302-SC-Cus-CB]
3. None appeared for the respondents. Present is an old appeal and there are several adjournment requests and absence of respondents. On 05.09.2022 it was directed that if the respondent fails to appear on the next date of hearing the appeal will be heard and disposed of exparte. On 09.01.2023 also none appeared on behalf of the respondent and the matter got listed for 10.01.2023 i.e. the date of hearing. Further, adjournment is therefore, opined unjustified and effect will be nothing but the unnecessary delay. However, we find that there are written submissions of respondents on record. From several adjournment requests and absence of Respondent we opine that he does not seem interested to pursue the appeal. Hence, we proceed to decide the matter ex-pare on merits.
4. It appears from the written submissions that the respondent has impressed upon that the adjudicating authority has clearly appreciated that it was actually VES which was having recognition for giving intermediate education/CBSE etc. from the respective statutory authorities. In addition to their regular curriculum, they were also giving coaching of competitive examinations and a part of bill was made in the name of VEIL. Since VES on its own could not run the classes for imparting commercial coaching being non-profitable organization it was probably that VES chose to raise the bills in the name of VEIL. Commissioner has also appreciated that there was no evidence except for bills/ profit and loss accounts to prove that the VEIL was capable of imparting any commercial coaching taking separate teaching staff, have separate pay rolls etc. based o,n these observations, that the demand against the assessee respondents has rightly been dropped. Appeal accordingly is prayed to be dismissed.
5. After considering the rival contentions, of the parties, perusing the entire record, we observe the following to be admitted facts of the case.
