No Service tax on commercial training/ education institution issuing course certificate which is recognized by law

Asian School of Media Studies Vs Commissioner of Central Goods and Service Tax (CESTAT Allahabad)

Facts- The appellant is conducting professional/ vocational training courses and providing certificates to the students, on the basis of which the students are getting jobs or are trained to work as an entrepreneur / self-employed. The issue involved in these appeals is whether the appellants herein are liable to pay service tax under the head ‘Commercial Coaching or Training Services’ during the period of dispute April, 2009 to 2015-16.

Conclusion-We find that the ‘Commercial training/ education/ coaching’ provided by the appellant imparts skills to the students/ trainees to enable them to seek employment or undertake self-employment directly upon completion of the course.

We also find that right from beginning till 30.06.2017 the activity of the appellant in providing educational !vocational training to their students, is as per the pre-defined curriculum in collaboration with the respective University, is exempt throughout, as they have provided education and training followed by issue of certificate of degree! diploma which is recognised by law for the time being in force.

In view of our considered findings, as above, we hold that the appellants is not liable to service tax.

FULL TEXT OF THE CESTAT ALLAHABAD ORDER

The issue involved in these appeals is whether the appellants herein are liable to pay service tax under the head ‘Commercial Coaching or Training Services’ during the period of dispute April, 2009 to 2015-16 (upto March, 2016). The demands have been confirmed by a common adjudication order dated 30.11.20 18 by the Commissioner, Central Goods & Service Tax, Noida. The detail of the demand is as follows:-

2. Brief facts of the case are that the appellants Asian School of Media Studies (ASMS in short) and Asian School of Communication (ASC in short) and also Asian Business School (ABS in short) all under the same management located at FC 14/15, Sector 16-A, Film City, Noida (U.P.) (premises known as Marwah Studios) are conducting professional/ vocational training courses and providing certificates to the students, on the basis of which the students are getting jobs or are trained to work as an entrepreneur / self-employed.

3. On the basis of intelligence, it appeared to Revenue that the appellants are evading payment of service tax as they are conducting training courses and providing certificates to the students without the approval of either University Grants Commission (UGC in short) or by All India Council of Technical Education (AICTE in short), therefore, are not recognised by law. Hence, it appeared that service tax was payable at the relevant rates and recoverable on the gross amount charged by these appellant Institutes, which was not being Another sister Institute under the same management ‘Asian Academy of Film and Television’ was registered with the Service Tax Department and was making compliances.

4. On summons, Shri Vinay Kumar, General Manager of Marwah Studio appeared on 18.04.2013 and his statement was recorded wherein he inter alia stated that in (i) ‘Asian School of Media Studies’ they were providing three years graduation and two years of post graduation courses in various stream of cinema, mass media, electronic media, multi-media,etc.,through (ii) ‘Asian School of Communication’, they were providing courses related to mass media and cinema. He also filed copies of documents like balance sheet, affiliation letter of ABS from AICTE for the academic year 2011-12 to 2013-14, certificate of affiliation as ‘authorised learning center’ of Punjab Technical University (PTU) dated 11.05.2009 for ASMS, ledger of course fees with respect to the period 2009-10 to 2011-12 for all the institutes.

5. Statement was also recorded of Shri Sudarsan Behera, Manager Accounts of ASMS under Section 14 of the Central Excise Act, wherein he inter alia stated that he looked after accounts, works of the Group Institutions. Shri Sandeep Marwah and members of his family were the Trustees or the interested persons in these institutions. The group Institutes were engaged in providing training to students, mainly in the areas of acting, production, direction, TV journalism, video editing & sound recording, advertisement and event managements, camera and lighting techniques etc. etc. The entire premises at FC-14- 15, Film City, Sector-16A, Noida (U.P.) is known as Marwah Studios. That the group’s training institutes were not registered with the Department nor they were paying any service tax, as according to their understanding, their institutes were functioning as vocational training Institutes, imparting skills to enable the trainees to seek employment or for self employment directly, which is an exempt activity under service tax.Thus, they have not got themselves registered with the Service Tax Department. That the various training courses provided by the group institutions focussed on different types of vocational training namely (i) short duration programme in production, direction (ii) TV Journalism; (iii) Camera & Lighting Techniques; (iv) Video editing and sound recording; (v) Advertisement & event management; (vi) Acting & presentation (including dance, singing, martial arts etc.) and (vii) Graphics & Animations etc. These courses may be categorised as vocational training as well as recreational training, as defined in Notification No. 24/2004-ST dated 10.09.2004 read with Notification No. 3/2010-ST. By virtue of the notification, the courses offered by their educational institutes, do not fall under the ambit of service tax. The training and courses conducted by their institutes, impart skills to the students to seek employment after completing of the course including self employment. Evidently, under these notifications, the training courses provided by them fall under institutes and are exempted from levy of service tax.

6. Statement of Shri Sandeep Marwah, Chairman of the appellant was recorded on 12.09.2013 under Section 14 of the Central Excise Act, 1944 wherein he inter alia stated that he looks after the overall functioning of the institute. These institutes are functioning as ‘vocational training institute’ in imparting skills to enable the trainees to seek employment or self-employment on completion of training. That ABS was recognised by AICTE since, 2011. In view of Notification No. 3/2010-ST, where vocational training institute is defined, in providing exemption from service tax to industrial training institute or industrial training centre affiliated to National Council of Vocational Training (NCVT), a query was made by Revenue whether the institute of the appellants were affiliated to NCVT. Shri Marwah stated that ABS was started in 2011 only and was recognised by AICTE. The other institutes were not affiliated by NCVT. Presently ASMS was affiliated with Mewar University and it was earlier affiliated to Punjab Technical University. That ASC had been created in 2011 and was affiliated to Mewar University. Further, AAFT was providing vocational courses and were affiliated to Mewar University since 2008. Thereafter, Shri Marwah, vide letter, received by Revenue on 17.09.2013, submitted copies of various documents as follows:-

a) Affiliation certificate of Asian School of Media Studies (purported to be issued on 08.03.2013 by Mewar University)

b) Affiliation certificate of Asian School of Communication (Purported to be issued on 01.04.2011 by Mewar University).

c) Affiliation certificate of Asian Academy of Film & TV (Purported to be issued on 01.11.2011 by Mewar University).

d) Sample copy of Degree issued by Punjab Technical University.

e) Sample copy of Degree issued by Janardhan Raj Nagar Rajasthan Vidyapeeth University.

f) Sample certificates (total 2 in no.) claimed to be issued jointly by AAFT and by Mewar University.

g) Month-wise fees received in respect of Asian School of Media Studies, Asian School of Communication, Asian Academy of Film & Television from April 2013 to August, 2013.

7. Revenue made correspondences with University Grants Commission to verify/ clarify the status of the appellant’s institute as well as the authority of affiliation letter. The UGC vide their letter dated 26.12.2013 intimated as under:-

i) Asian Academy of Film & TV (AAFT), Asian School of Communication (ASC) and Asian School of Media Studies (ASMS) situated at Marwah Studio Complex, Noida are not included in the list of Universities as maintained by the UGC and cannot award degrees.

ii) Mewar University, Gangrar, Chittorgarh (Rajasthan) was established by an Act of the State Legislature of Rajasthan as a Private University and is empowered to award degrees as specified by the UGC under Section 22 of the UGC Act, 1956 at its main campus in regular mode with the approval of statutory bodies/ councils, wherever required.

iii) Mewar University, Gangrar, Chittorgarh (Rajasthan) is not authorised to open study entre/ off-campus centre beyond the territorial jurisdiction of the State. The university cannot open off-campus center(s)/study centre(s) even within the state as per provisions contained in the UGC (establishment of and Maintenance of Standards in Private Universities) Regulations, 2003.

iv) UGC has not granted any approval to Mewar University to run courses in collaboration with Asian Academy of Film & TV (AAFT), Asian School of Communication (ASC) and Asian School of Media Studies (ASMS) situated at Marwah Studio Complex, Noida.

8. Enquiries was also made with Mewar University, Chittorgarh who vide letter dated 31.12.2013 and 15.01.2014 inter alia stated-

i) They have not given an affiliation to any institute of Marwah Studios for awarding any degree or certificate. They are only sending their students to Marwah Studios for training in various courses of Mass Communication and acting and for which they have entered into an agreement (MoU) with Marwah 

ii) Marwah Studio, under the name and style of various institutions, is enrolling students for different courses on its own, and is giving them certificates and diploma. (emphasis supplied)

9. As per the allegation in the show cause notice, on perusal of the agreements entered into between Mewar University and appellant’s Institute ASC, ASMS and AAFT separately,it appeared that these agreements were for opening of business and development and training centers of Mewar University respectively, and not for granting any affiliation by the said University, for conducting educational courses recognised by law. Moreover, UGC has not granted any approval to Mewar University to run courses in collaboration with the appellant’s.

10. It is also alleged that the certificate of affiliation of AAFT with Mewar University bears the date as 01.11.2008, whereas Mewar University was established by the Rajasthan Government Act, 4 of 2009 enacted on 05.02.2009. Thus, the certificate of affiliation dated 01.11.2008is without authority of law.

10.1 Further, certificate dated 11.05.2009 is issued by PTU to ASMS, by which affiliation was claimed to PTU. On perusal, it appeared that PTU recognised ASMS as its ‘Authorised Learning Centers’ under ‘Distant Learning Programme’. Thus, it appeared that the certificate of PTU cannot be taken as a certificate of affiliation, nor does it recognise the premises of appellant at FC14/15, Sector-16A, Noida as the authorised center of PTU. It further appeared that the students of ASMS are not getting any degree issued by PTU for pursuing these courses. Instead, it is ASMS which gives the certificate/ degree after completion of the courses.

11. In response to further query from Mewar University, Shri Ashok Kumar Gadia, Chairperson, submitted letter dated 28.03.2014 wherein he stated that Mewar University have not given any affiliation to the appellant’s Institute. They only send their students to the appellant’s for training in various courses of mass communication and acting, etc., for which agreements (MoU) were entered into between Mewar University and appellants. In her statement Dr. Alka Agrawal, Director of Board of Studies of Mewar University, stated that they had a tie up with the appellants for training of students of Mewar University in media and film courses.

12. Further, by letter dated 03.02.2014 Shri Sandeep Marwah, President Chairman of the appellants further submitted as under:-

(A) that the various educational institutes being run in the campus premises, popularly known as Marwah Studios, at address at FC-14/15, Sector -16A, Film City, Noida focus on different types of training and courses to students which may be summarised as under-

Short duration programs in Production, Direction, TV journalism, Camera & Lighting Techniques, Video editing and Sound recording, Advertisement & Event management, Acting & Presentation (including, dance, singing, martial arts etc.) and Graphics & Animation etc.

(B) that these courses may be categorised as ‘vocational training’ as well as ‘recreational training’ as defined in Notification No. 24/2004-ST dated 10.09.2004 and also Notification No. 03/2010-ST dated 27.02.2010, thereby these courses do not fall under the ambit of Service Tax.

(C) that the training and courses mentioned above, impart skills to the students/ trainees to seek employment after completion of these courses and training as one is able to adopt it in the form of employment or one may undertake self employment e.g. by starting his! her own production house, education! training centre etc.

(D) the Circular No. 107/01/2009-ST dated 28.01.2009 clarifies about exemptions as well as chargeability of service tax on the nature and types of training! courses provided by ‘vocational training institutes’ and it reads as:-

‘The vocational training institutes are exempted from service tax vide Notification No. 24/2004-ST dated 10.09.2004, as amended. By definition, such institutes should provide training or coaching that imparts skill to enable the trainee to seek employment or undertake, self employment, directly after such training or coaching.

However, a careful reading of the definition shows that the exemption is available only to such institutes that impart training to enable the trainees to seek employment or self employment.

(E) that the student! candidates are provided courses! training in the programs from initial levels, wherein, these students do not possess any such skill before joining these courses! training. They (students) are provided courses! training which enable them to seek employment or self employment.

(F) that further more vide  Notification No. 12/ 2012-ST dt  17-03-2012 and thereafter vide Notification No. 25/2012-ST dated 20.06.2012, different types of training and courses provided by AAFT are not falling in the ambit of service tax.

(g) that however ‘to buy peace of mind’, AAFT has preferred to go under ‘The Service Tax Voluntary Compliance Encouragement Scheme (VCES)’ which came into effect from 10.05.2013 and has deposited Service tax amounting to 24,21,347/- on 31.12.2013 as 50% of the declared Service tax liability.”

13. That further letter dated 26.05.2014 Shri Marwah, further submitted as follows:-

“(A) ‘Asian academy of Film & T.V.’ is a proprietary firm of Sandeep Marwah, whereas, ‘Asian School of Media Studies’ and ‘Asian School of Communication’ are run under the charitable society/ trust named ‘Asian Society of Film & Television’, in which ‘Sandeep Marwah’ is one of the trustees.

(B) That the society, namely, ‘Asian Society of Film & Television’ is registered with Income Tax Department u/s 12AA’ of the Income Tax Act,

(C) That the Charitable educational institute namely ‘Asian Society of Film & Television’ to buy peace of mind’, had preferred to go with ‘The Service tax Voluntary Compliance Encouragement Scheme (VCES), which came into effect from 10.05.2013 and had deposited the Service Tax.

(D) That vide Notification No. 12/ 2012-ST dt  17-03-2012, ‘Services by an entity registered under Section 12AA of the Income Tax Act, 1961 by way of charitable activities’, has been exempted from service tax. Further, ‘Asian Society of Film & Television’ is already registered u!s 12AA of the Income Tax Act, hence exemption from service tax is applicable to it and also applicable to institutions running under it namely, M!s Asian School of Media Studies and M!s Asian School of Communication.”

14. It further appeared to Revenue that, it is the appellant’s Institutions which give the certificate/ degree after completion of the course. It was further alleged that the courses conducted by the appellants cannot be termed as vocational courses as these courses are professional courses, attracting high fees. When service tax was initially imposed on ‘Commercial Coaching and Training’ the Board clarified vide Notification No. 59/2009-ST dated 20.06.2003,that vocational coaching and training services provided by like typing and shorthand institute, vehicle repairing institute, tailoring institute, ITI, computer centres, painting, dancing etc., would not be chargeable to service tax.

15. It appeared to Revenue that exemption was never meant for highly glamorous film/ TV courses being imparted by appellant. However, it appeared that services provided by ‘vocational training institute’ were exempt by virtue of Notification No. 24/2004-ST, which provided definition of such institutes as under:-

“Vocational training institute means – a Commercial Training and Coaching Centres which provide vocational training or training that impart skill to seek employment or undertake self employment, directly after such training or coaching”.

It further appeared to Revenue that the appellants were not affiliated to Mewar University, Chittorgarh for providing educational courses recognised by law. As per the ‘University Grants Commission (Establishment and Maintenance of standard in Private University) Regulation, 2003’, a private University established under the State Act shall operate ordinarily within the boundaries of the State. However, after the    development of the main campus, in exceptional circumstances, the University may be permitted to be open off campus centres or off – shore campus, after five years of its coming into existence. Further, from letter dated 26.12.2013 of UGC, it is evident that no approval was granted to MU to conduct courses in collaboration with the appellant. Further, by letter dated 07.01.2014 the ‘Distance Education Bureau’ of UGC have also intimated that theyhave not granted any recognition to Mewar University for imparting distance education in collaboration with the appellant.

16. It therefore appeared to Revenue that the course/ training imparted by the appellants during the period under dispute, were taxable to service tax, under the head ‘Commercial Training or Coaching Centre’, or as services are, other than those covered under the negative list.

17. The definition of ‘Commercial Training or Coaching Centre’ under Section 65 (27) (w.e.f. 01.05.2011, after amendment), reads-

“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 [****]…. omitted w.e.f. 1.5.2011 by section 74 of the Finance Act, 2011.”

18. Further, Notification No. 33/2011-ST dated 25.04.2011, effective from 01.05.2011, exempts 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.

19. It further appeared to Revenue that after introduction of the negative list (Section 66D) w.e.f. 01.07.2012, only education as part of a curriculum for obtaining a qualification recognised by any law, for the time being in force,is exempt from service tax.

Thus, w.e.f. 01.07.2012 or from 01.05.2011, the activities of appellants during the period under dispute, being not recognised by any law, are chargeable to service tax.

20. In order to quantify the service tax payable by the appellant, the details of amounts collected towards course fees and other receipt was called for, which were submitted by the appellant. It is further alleged that the appellant were required to get themselves registered to pay service tax& to file their returns. Accordingly, show cause notices were issued demanding service tax as aforementioned. Further, proposing to impose penalty under various sections. The show cause notice(s) was adjudicated on contest by the learned Commissioner vide common order-in-original. The proposed demands were confirmed and further penalties were imposed, alongwith demand for interest. Being aggrieved, the appellants are in appeal.

21. As the issue in both the appeals are common and both the appellants are under the same management, hence, the appeals have been heard together and are being disposed of by this common order.

22. Heard the parties and perused the record.

23. Shri Abhinav Kalra, ld. Chartered Accountant appearing for the appellants urges that, gazette notification for establishment of PTU and MU may be referred to, and attention was drawn to the copy of notification in the paper book; both the Universities are recognised under the relevant State laws and have been created by the State legislatures. Further, attention is drawn towards the Memorandum of Understanding between the appellants and PTU!MU. It is demonstrated that several courses were being offered by the appellant in collaboration !affiliation with PTU!MU. He further drew our attention to the admission ! fee slips. The students have filled the admission  form of MU, Chittorgarh and have paid admission fee by demand draft  in favour of MU. For example, we are referring to the admission form etc., of Kumar Sunny (student), who has been issued semester wisemark sheet! testimonial by MU for the programme ‘Bachelor in Arts – Mass Communication and Journalism’. On completion of the  duration of the course – MU have issued the degree of Bachelor in Arts  in Mass Communication and Journalism, for the final exam held in  June, 2016. Kumar Sunny has also paid semesterwise course fee to  the appellant ^–ASMS, from time to time. Similarly, some more sample  documents has been annexed with regard to education! vocational  course conducted with collaboration with MU, like in the case of other student(s) namely Yash Dawra, Devansh Tiwari, etc. etc. These  documents have not been disputed and were placed before the Court  below also. The documents demonstratethat the appellants and MU  have worked in collaboration, as the students were admitted in MU,  and under the MoU, have studied as per the University curriculum in  the institutes ! schools of the appellant, and thereafter the exams have  been conducted by MU and after evaluation the students have been  awardedBachelor degree!certificate by the University. Similarly, the appellant have demonstrated with respect to courses conducted in collaboration with PTU. (emphasis supplied).

23.1 Learned Counsel for the appellants have also demonstrated  the proof of employment of several students who have studied and !or have attended the various courses conducted by the appellants in  collaboration with MU! PTU, etc. It is evident that the appellants are  imparting education and vocational training as per prescribed  curriculum of the respective Universities, and after completion of the  course, the students appear for the exams conducted by the University and on such qualification, have been granted the Degree by the  University. Accordingly, the activity of the appellant under dispute is  exempt. Reliance is placed on the rulings in the case of (i) Gateway of Entrepreneurship & Management Studies Trust vs. Commissioner – 2018 (3) TMI 503(ii)JMC Educational Charitable Trust vs. Commissioner -2011 (21) J133 (Mad.). = 2011–TIOL­410-CESTAT-MAD., (iii)Malapuram Dist. Parallel College Assn. Vs. U.O.I. -2006 (2) STR 321 (Kerala).

(emphasis supplied).

23.2 Learned Counsel for the appellants further contends that the learned Commissioner have erred in confirming the demand, without taking into account the fact that the appellant are imparting education! vocational training, which is authorised by the respective University, and in collaboration with the Universities the courses have been conducted and vocational training given to the students. As such, the education and training granted by the appellant in collaboration with the University, has led to grant of Degree recognised by law. Further, there is no objection raised with respect to the courses conducted by the appellant in collaboration with the respective University by the UGC, which is the controlling or administrative authority under the Act of Parliament.

24. To appreciate the facts and circumstances, we take notice of the legal provisions during the period of dispute which are as follows:-

“(A) For the Period 01.04.2009 to 26.02.2010 Notification No. 24/2004-ST, dated 10.09.2004 under which the Noticees have claimed exemption from service tax during the relevant period reads as under:

‘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 the public interest so to do, hereby exempts the taxable services provided in relation to commercial training or coaching, by, –

(a) a vocational training institute; or

(b) a recreational training institute,

To any person , from the whole of the service tax leviable thereon under section 66 of the said Act.

Explanation. – For the purposes of this notification, –

“vocational training institute” means a commercial training or coaching centre which provides vocational training or coaching that impart skills to enable the trainee to seek employment or undertake self-employment, directly after  such training or coaching)

“recreational training institute” means a commercial training or coaching centre which provides training or coaching relating to  recreational activities such as dance, singing, martial arts or hobbies.”

Further, CBEC’s Circular No. 59/8/2003 dated 20.06.2003 was issued in the matter, the relevant para of the said circular reads as under:

“Vocational coaching and training services provided by typing and shorthand institutes, TV/ vehicle repair training institutes, tailoring institutes, industrial training institutes, foreign language institutes, computer training centres, hobby classes, institutes teaching martial arts, painting, dancing  etc. would not be chargeable to service tax.”

It is also relevant that Section 65(27) of the Act defines ‘Commercial Training or Coaching Centre’ as under:

Till 30.04.2011

” ‘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 recognized by law for the time being in force.”

(emphasis supplied).

From 01.05.2011 to 30.06.2012 During this period the definition of the services in  question read as under :-

” ‘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 ….]deleted.

Further, w.e.f. 01.05.2011, Notification No. 33/2011-ST dated 25.04.2011 has been issued to provide as under:

“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 recognized 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. (A)

W.e.f. 01.07.2012 – the negative list of services has been introduced and the provisions governing taxability of services have undergone a complete overhaul. Under the new regime, Section 66B provides for charge of Service Tax on all services, other than those services specified in the negative list of services.

Section 65B(34) of the Act defines ‘negative list’ to mean the services which are listed in Section 66D. Section 66D(1) of the Finance Act,1994 lists the following services:

(1) services by way of-

(i) pre-school education and education up to higher secondary school or equivalent;

(ii) education as apart 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;

The above entry in the negative list was omitted w.e.f. 14.05.2016. Vide the Notification No. 06/2014-ST, dated 11.07.2014, Entry No. 9 of the exemption  Notification No. 25/2012-ST, dated 20.06.2012 was substituted with:

“Services provided, –

(a) by an educational institution to its students, faculty and staff

(b) to an educational institution, by way of-

(i) transportation of students, faculty and staff (emphasis supplied)

(ii) catering, including any mid-day meals scheme sponsored by the Government,.

(iii) security or cleaning or house-keeping services performed in such educational institution;

(iv) services relating to admission to, or conduct of examination by, such institution; “;

Vide the same notification, the definition of ‘educational institution’ as clause-(oa) in para 2 of the Notification No. 25/2012-ST as under:

(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;

(iv) education as a part of an approved vocational education course;

(C) The definition of ‘educational institution’ as inserted above was substituted,  vide Notification No. 9/2016-ST, dated 01.03.2016 w.e.f. 14.05.2016, with:

(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;”

(emphasis supplied).

24.1 From a bare reading of the aforementioned provisions relating to levy of service tax, it is evident, it is evident-

24.2 Exemption for ‘Commercial Training and Coaching’ – we find that 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, have been kept out of the scope of service tax, as defined under Section 65(105) (zzc), upto the period 30.06.2012 vide Notification No. 10/2003-ST dated 20.06.2003 read with Notification No. 33/2011-ST dated 25.04.2011.

24.3 Accordingly, we discuss tax liability period wise as there have been several changes made in the notification and statute from time to time.

24.4. Period 01.04.2009 to 26.02.2010

The learned Commissioner have observed that the activities of the appellant till the period 26.04.2010 may be categorised as ‘vocational training’, as well as ‘recreational training’ as defined vide Notification No. 24/2004-ST, as such, the courses offered by the appellants do not fall under the ambit of service tax.

24.5 We find that the Adjudicating Authority have confirmed the demand for this period, holding that the legislative intent is to exempt vocational courses like typing, TV repair, vehicle repairing, tailoring, etc., that impart skill to enable a training to seek employment or undertake self employment, directly after such training or coaching. The Adjudicating Authority further observed – intention of legislature is  clear, that by exemplifying the aforementioned categories, the courses  (as in the case of the appellant) attracting high fees which are professional in nature, would not be covered under vocational course category. Learned Commissioner has further observed,the nature of course conducted by the appellants are “professional/ technical” attracting high fees, cannot be included in the category of vocational  courses within the scope of Notification No. 24/2004-ST.

(emphasis supplied).

24.6 We find that the Adjudicating Authority has misconceived the scope of taxable and /or chargeability to tax and have erred in coining his own definition of the term “vocational training and coaching” which is not provided in the statute. The refusal to grant exemption to the appellant, inspite of admission by the learned Commissioner – that appellants are providing education/ vocational training, but the conclusion that such courses shall not qualify as vocational course due to the quantum of fee charged (high). We further find that the learned Commissioner has rejected the benefit of exemption and/or exclusion provided in the statute from tax, by observing that courses provided by the appellants are professional and technical in nature as well as glamorous. We find that such interpretation is wholly misconceived. The Adjudicating Authority has failed to appreciate that there is no such bar (with respect to the quantum of fee), in the statute for grant of exemption. Further, the list of services (enumerated in Circular No. 59/8/2003) being in the nature of vocational courses is by way of example only. Further, the list ends with the word etcetera/etc., the conscious use of the word ‘etc.’ indicates the wide scope of the exemption notification. Such observation of the learned Commissioner are by way of conjecture and surmises, have no legal sanctity.

24.7 Thus, we find that the ‘Commercial training/ education/ coaching’ provided by the appellants imparts skills to the students/ trainees to enable them to seek employment or undertake self-employment directly upon completion of the course.

25. Period 27.02.2010 to 30.06.2017

The appellants have contended that they were authorised learning study / training centre, or in the nature of parallel college of PTU and MU etc. and as such were exempted from service tax levy under Notification No. 33/2011-ST dated 25.04.2011. The said notification provides ‘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’ are exempt from service tax. Admittedly, the appellants have imparted vocational /educational training to their students/ trainees, who have on successful completion been awarded degree/ diploma by the concerned University and as such they are entitled to exemption under this Notification.

25.1 We find that in the impugned order the demand have been confirmed on the observation that the appellant did not have the authority to issue such certificate /degree/ diploma, and further they did not have valid affiliation with the University – PTU/MU. We find that this contention of Revenue is contrary to the facts, as the appellant have demonstrated that the degree/ diploma certificates were issued by the respective Universities. Thus, the appellants have imparted education/ vocational training in collaboration with the University and the students have been given qualification or degree which is recognised by law, for the time being in force.

25.2 We further find from the impugned order that the Adjudicating Authority has admitted that the appellant is ‘authorised learning centre’ to PTU, but have further observed that such authorisation was in respect of Delhi address only and further such authorisation was for distant education programme only.

25.3 We find that admittedly the students to whom education and training was imparted by the appellant, have received degree/ diploma certificates issued by the respective University. The legal status of the respective University have not been found to be untrue. Further, we find that there is no such bar on the University, in getting the students trained in collaboration with the appellants, for which the syllabus has been prescribed by the University and periodically the University has conducted the exam and issued degree to such successful candidates. Further, learned Counsel has demonstrated that there was a proper laid down curriculum for each of the programme conducted by the appellant, in collaboration by the respective University. Thus, we find that the appellants have conducted education or vocational training, as part of curriculum for obtaining qualification, recognised by law for the time being in force. Further, we find that the observation of the learned Commissioner that the recognition granted by the PTU to the appellant with respect to the Delhi address is also erroneous, as the Delhi address is the city office or the Head Office, whereas the campus is located at Noida. Further, the learned Counsel for the appellant has demonstrated by annexing a letter from PTU, recognising change of address to Noida Campus.

25.4 We further find that learned Commissioner have admitted in the show cause notice itself, that MU is sending their students for training/ education with respect to various courses like Mass Communication, acting, etc. to the campus of the appellants. We further find that there is no such requirement as to affiliation from a University. The only requirement is, that the course being taught should be part of a curriculum, leading to grant of degree / diploma, recognised by law. Admittedly, the issue of degree/ diploma by the respective Universities have not been found to be fraudulent.

25.5 Further, admitted fact is that the appellant’s institutions are run by a ‘Charitable Institute’ namely ‘Asian School of Film and TV’, which is recognised and registered under Section 12A/ 12AA of the Income Tax Act.

25.6 We further find that the MoU entered between the appellants and respective University, providing inter-alia for:-

“a) Marketing related activities such as preparation, printing and dissemination of brochures etc.;

b) Admission related activities such as preparation, printing and distribution of admission forms, counselling, entrance-test and students registration & admission processing;

c) Administrative activities such as management of student affairs, record maintenance and student notifications;

d) Academic activities such as design of course curriculum, creation of program content with due approval of MU/PTU;

e) Student evaluation by designing test mechanism, conducting examinations, evaluating industrial projects;

f) Database management and student’s records.”

25.7 Further, MoU provides that the appellants are entitled touse the logo and style of the University for the  specified purposes.

26. Similarly, the appellant has also entered into an agreement with Shobhit University, U.P. (SU for short) effective from the year 2015-16. Similarly, SU is also a State Government University established by the State Legislature, which has received accent of the Governor on 06.03.2012, and was notified in the Gazette Notification on 05.07.2012. Thus, SU is a recognised University under Section 2FF of the UGC Act. The appellants have been appointed as a study ! extension centre of SU for professional ! vocational academic courses leading to issue of degree! diploma courses, primarily related to media and fashion study.

26.1 We further find that right from beginning till 30.06.2017 the activity of the appellant in providing educational !vocational training to their students, is as per the pre defined curriculum in collaboration with the respective University, is exempt throughout,as they have provided education and training followed by issue of certificate of degree! diploma which is recognised by law for the time being in force. Further, we find that on completion of the courses conducted by the appellants, the students! trainees have either received employment and!or are competent to be self employed.

27. We further find that a Coordinate Bench of this Tribunal (Chennai) in the case of Gateway of Entrepreneurship and Management Studies Trust vs. CCE (supra), under the facts that Gateway was providing coaching and training services to the students of Allagappa University. The University was collecting fee from the students for such coaching. The Department was of the view that the said activities was falling under the ‘Commercial Training or Coaching Service’. On appeal by the assessee, this Tribunal appreciating the fact that the assessee is actually an AuthorisedEducation Centre in collaboration with Allagappa University, and the fee collected from the students are remitted to the University and the examination are conducted by the University. Thereafter, the Degree/ Diploma certificate was issued by the University and therefore the activity rendered would not fall within the definition of ‘Commercial Training or Coaching Services’. The Tribunal also noticed that Gateway are collecting service charges apart from fees which according to Revenue is sufficient to deny exemption under Notification No. 10/2003-ST. The Tribunal relied on its earlier ruling in the case of JMC Educational Charitable Trust vs. CCE (supra) and also referred to the ruling of the Kerela high Court in the case of Malapuram Distt. Parallel College Assn.vs. UoI (supra) where similar demand have been set aside observing that the Training and Coaching provided by the appellant / assessee therein is asper the course or curriculum of the University. The Tribunal also took notice that the definition of ‘Commercial Training or Coaching Centre’ under Section 65(27) of the finance Act contains exclusion clause excluding – pre-school coaching and training centre or any institute or establishment which issues any certificate or Diploma/ Degree or any educational qualification recognised by law for the time being in force. This Tribunal recorded a finding that the appellant / applicant are authorised study centre under a MoU entered with the University, on the basis of ‘Distance Education Centre (DEC) guidelines issued under the IGNOU Act, 1985. Accordingly, it was held that the appellant/ applicant are exempted from Service Tax, even without the benefit of Notification No. 10/2003- ST.

28. Similar view was taken by another Co-ordinate Bench of this Tribunal in Trichy Institute of Management Studies CCE (Chennai Bench) Final Order No. 286-287/2011 dated 07.09.2011, wherein the Tribunal took notice that the Institution is run like a parallel College and the students are obtaining Degree from the Allagappa University under Distance Education Programme under MoU. This Tribunal relied on the ruling of the Kerala High Court in the case of Malapuram Distt. Parallel College Assn., where the High Court had declared levy of service tax on parallel Colleges as arbitrary and violative of Article 14 of the Constitution of India. The Hon’ble High Court further observed that levy of service tax on the education and training provided by parallel college indirectly falls on the students, which is discriminatory.

29. In view of our considered findings, as above, we hold that the appellants is not liable to service tax.

30. As regards, the ground of limitation, we find that the appellant(s) were under bonafide belief that their activity is not liable to service tax and further we find that the appellants have maintained proper record of their activity and have been making compliance with various laws including Income Tax Act, as a charitable organisation. The books of accounts have been regularly audited and have been filed with various Government Authorities. We find that the issue in dispute involves interpretation of statute, and as such no malafide can be attributed on the appellants. Admittedly, the only allegation made in the show cause notice for invoking the extended period of limitation is that the appellants have failed to take registration, assess their tax liability, pay the tax, file the returns etc. Admittedly, the whole demand is based on data and information supplied by the appellant as has been demanded by the Revenue. Accordingly, we hold that extended period of limitation is not attracted and the show cause notice(s) are bad for invocation of extended period of limitation.

31. Accordingly, appeals are allowed and the impugned order is set aside. The appellants are entitled to consequential benefits, in accordance with law.

(Pronounced on 11/11/2021).