SRM Institute of Hotel Management Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that the fees collected for the course approved by the Industries Department is not leviable to service tax under Commercial Training and Coaching Services. Accordingly, matter remanded back to for denovo consideration.
Facts- The appellant M/s. SRM Institute of Hotel Management and Catering Technology is engaged in conduct of training courses in the field of Hotel and Catering Management and are awarding certificates to the trainees on completion of said courses. The degree/diploma course for Hotel and Catering Management conducted by the appellant is not a course recognised by any statutory authority and the same does not lead to award of any diploma or degree recognised by the Government.
As the courses imparted by the appellant are neither approved by any statutory authority, nor affiliated to any university, it appeared that the appellant is providing Commercial Training and Coaching Services. They had not discharged the service tax on the income received from such services during the period from April 2008 to March 2012.Show Cause Notice was issued invoking the extended period proposing to demand Service Tax along with interest and also to impose penalty. After due process of law, the original authority confirmed the demand along with interest and also imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal.
Conclusion- We are not able to understand whether separate fees are collected from students for this course. The order is not clear as to the details of demand in regard to this course. The appellant has not been able to show as to what portion of the demand is covered by the fees collected for the course approved by the Industries Department. We find that this issue also requires to be remanded.
From the above discussions, we set aside the impugned order and remand the matter to the adjudicating authority for denovo. The appellant shall be given sufficient opportunity to furnish details and for personal hearing. All issues are left open. In the result, the appeal is allowed by way of remand.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The Appeal is filed against the order passed by the adjudicating authority confirming the demand of Service Tax under the category of “Commercial Training or Coaching Services”.
2. Brief facts are that according to the Department, the appellant M/s. SRM Institute of Hotel Management and Catering Technology is engaged in conduct of training courses in the field of Hotel and Catering Management and are awarding certificates to the trainees on completion of said courses. The degree/diploma course for Hotel and Catering Management conducted by the appellant is not a course recognised by any statutory authority and the same does not lead to award of any diploma or degree recognised by the Government. Section 65(26) of the Finance Act, 1944 defines Commercial Training or Coaching Service, as ‘any training or coaching provided by a commercial training or coaching centre’. Further, Section 65(27) of the Finance Act, 1994 defines Commercial Training and Coaching Centre as ‘any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject in any field other than sports, with or without issuance of certificate and includes coaching or tutorial classes but does not include pre-school coaching or diploma or degree or any educational qualification recognised by law for the time being in force’. Section 65(105)(zzc) of the Finance Act, 1994 defines the taxable service as ‘any service provided to any person by any commercial training or coaching centre in relation to commercial training or coaching’.
3. In view of the above provisions, as the courses imparted by the appellant are neither approved by any statutory authority, nor affiliated to any university, it appeared that the appellant is providing Commercial Training and Coaching Services. They had not discharged the service tax on the income received from such services during the period from April 2008 to March 2012. Show Cause Notice was issued invoking the extended period proposing to demand Service Tax along with interest and also to impose penalty. After due process of law, the original authority confirmed the demand along with interest and also imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal.
4. On behalf of the appellant, Shri V. Prasanna Krishnan, Consultant appeared and argued the matter. It is submitted by the learned Consultant that the appellant, namely, SRM Institute of Hotel Management is a separate wing of SRM Arts and Science College, which is a unit of M/s. Valliammai Society, a registered non-profit society. The appellant made representation before the adjudicating authority that the appellant is not an identifiable entity for demand of service tax. The society is a charitable institution. The courses taught by SRM Arts & Science College include courses in Hotel and Catering Management which is a course recognized by the University of Madras. The Arts & Science College has an affiliation to the University of Madras and the said University confers degrees and diplomas to successful candidates passing from the college. Though these facts were presented before the adjudicating authority, these submissions have been totally ignored and the appellant, viz., SRM Institute of Hotel Management has been held as an independent entity imparting the course of Hotel and Catering Management which is factually wrong.
5. To support the above arguments, the learned Consultant has produced the copy of the certificate of registration of the Valliammai Society dated 24.07.1981. Later, the SRM Deemed University was formed by a trust deed executed on 30.07.2001. The family members and founders of the society had decided to make some of the institutions which were under the aegis of the Valliammai Society to continue under the Valliammai Society itself. Some institutions were included under SRM Deemed University. The Art and Science College which was imparting the Hotel and Catering Management course continued to operate under Valliammai Society and continued to be affiliated with the University of Madras. The documents with regard to payment of fees, the pass list of the students produced along with the appeal memorandum where referred by the learned Consultant to submit that the degree certificate of Bachelor of Science in Hotel and Catering Management is awarded to the successful students by the University of Madras. It is submitted by the learned Consultant that the Department has erroneously raised the demand alleging that SRM Institute of Hotel Management is conducting the course of Hotel and Catering Management and that it is not affiliated to any University and is an unapproved course.
6. The learned Consultant referred to the decision of the Tribunal in the appellant’s own case for the period from July 2003 to March 2008, wherein the very same issue of demand of Service Tax for rendering commercial coaching and training services for imparting Hotel and Catering Management course was decided by the Tribunal. The Tribunal remanded the matter for denovo adjudication. The same is still pending for denovo consideration by the adjudicating authority.
7. The second issue is a small amount of demand with regard to Arts and Craft course imparted by the appellant. It is submitted by the learned Consultant that this one year course is conducted as per the approval and recognition of the Industries Department of State of Tamil Nadu. As per letter dated 03.09.2009, the appellant has been given permission by the Department of Industries, Tamil Nadu to conduct the said course which includes practical and theory classes. This course is also thus a recognised course as the certificates are issued by the Industries Department of the State of Tamil Nadu. The demands therefore cannot sustain. The learned Consultant prayed that the appeal may be allowed.
8. The learned AR supported the finding in impugned order.
9. Heard both sides.
10. The demand has been raised under the category of ‘commercial coaching and training services’ alleging that the appellant is imparting courses which are not approved and recognised by any University/Board. The relevant provisions have already been noticed in para 1 of this order.
11. It is the case of the appellant that they are not imparting the impugned Hotel and Catering Management course and that it is the Arts and Science College which is functioning under the aegis of Valliammai Society that is imparting the said course. It is also submitted that the Arts and Science College is affiliated to Madras University. The documents enclosed along with the appeal book show that the Bachelor degree in Hotel and Catering Management is awarded by the University of Madras. The appellant has also produced the attendance list of students, list of the students who passed which were forwarded to University. In page 152 to 156 of the appeal book, the fees collected from the students for the B. SC., Hotel and Catering Management course is enclosed.
12. In para 4 of the Show Cause Notice dated 11.12.2012, the Department has put forward the details of the income received for rendering Commercial Training and Coaching Services. It is seen from the said table reproduced below that the income received by the appellant (SRMIHM) is subject to levy of Service Tax:-
