Jamnalal Bajaj Institute of Management Studies Vs Commissioner of CGST (CESTAT Mumbai)
The Customs, Excise and Service Tax Appellate Tribunal allowed the appeal filed against the Order-in-Appeal dated 27.03.2017, which had held the appellant liable to service tax under the category of “Manpower Recruitment or Supply Agency Service” in relation to placement fees collected from students during the period 2006-07 to 2007-08.
The dispute arose from a show cause notice dated 28.08.2009 proposing service tax demand of Rs. 5,33,539 along with interest and penalties under Section 65(105)(k) of the Finance Act, 1994. The Adjudicating Authority had originally dropped the demand by relying upon the Tribunal’s decision in Motilal Nehru Institute of Technology vs. CCE, Allahabad. However, the Commissioner (Appeals) reversed the order, holding that placement-related activities undertaken by institutions such as IITs and IIMs were taxable under “Manpower Recruitment or Supply Agency Service” in view of Circular No. 96/7/2007-ST dated 23.08.2007.
Before the Tribunal, the appellant argued that the issue stood conclusively settled by the final decision in Motilal Nehru National Institute of Technology vs. CCE & ST, Allahabad, wherein the Tribunal had held that placement facilitation by educational institutions does not fall within the ambit of manpower recruitment or supply service where fees are collected from students rather than recruiting companies.
